(Repeats to additional subscribers)
* Break out in 10-year Treasury yields supports greenback
* Expectations of upbeat tone from ECB's Draghi
* Commodities currencies hit by oil dip
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, March 9 The dollar hit a three-week high
against the yen on Thursday, on course for a fourth straight day
of broader gains after a strong ADP job number in the previous
session broke 10-year U.S. government bond yields out of a
As the dollar struggled last week to make more progress on
the back of a flip in money markets towards a rise in official
U.S. interest rates this month, a number of analysts had pointed
to muted moves in 10-year yields as one element holding the
It broke above 2.52 percent for the first time this year on
Wednesday and was trading at close to 2.58 percent in early
trade in Europe on Thursday. That helped the dollar jet half a
percent higher to 114.90 yen.
Citi currency strategist Josh O'Byrne said that expectations
of a positive shift in the European Central Bank's rhetoric on
the economy ahead of a statement and news conference later on
Thursday may also have played a role in those moves.
"We broke 2.52 percent yesterday, which was the high of the
range in recent weeks and certainly there seems to be some more
optimism (around the dollar)," he said.
"Less dovish expectations on the ECB are helping diminish
some of the pressure on long-end yields in the U.S. too and that
is having more influence on the dollar against some of the
higher yielders and dollar yen."
The dollar was also marginally higher at $1.0547 per euro
and traded above 102 on the index against a basket of currencies
used to measure its broader strength.
The European Central Bank is set to keep monetary policy on
hold on Thursday as it casts a cautious eye ahead to high-risk
elections in the Netherlands and France during an upsurge in
populist, anti-establishment sentiment.
But there is growing speculation in markets that improving
growth and rising inflation will allow it to begin to withdraw
its emergency stimulus for the economy at the end of this year.
A German banking association said that the bank should begin
on Thursday to prepare the ground for an exit from its
ultra-loose monetary policy.
Oil- and commodity-linked majors including the Canadian,
Australian and New Zealand dollars and the Norwegian crown all
hit multi-week lows after supply issues provoked a five-percent
slump in oil prices on Wednesday.
"The Canadian dollar has been a victim of hawkish interest
rate expectations in the United States, lower oil prices and a
Bank of Canada that has expressed concern over the outlook for
the Canadian economy," analysts from currencies exchange LMAX
said in a morning note.
"Wednesday’s stellar U.S. ADP print and another big slide in
oil have opened fresh 2017 lows."
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Writing by Patrick Graham; Editing by Toby Chopra)