March 26, 2019 / 3:52 PM / 3 months ago

FOREX-Dollar edges up on higher U.S. yields, brushes off weak data

    * U.S. 10-year yields rise from 15-month lows as Wall Street
    * U.S. homebuilding falls in February, consumer confidence
    * Pound awaits British lawmakers' vote on Brexit options
    * Graphic: World FX rates in 2019

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 26 (Reuters) - The U.S. dollar inched higher
against a basket of currencies on Tuesday as U.S. benchmark
10-year yields rose from 15-month lows on solid gains in U.S.
shares, brushing aside disappointing domestic data on housing
starts and consumer confidence.
    The U.S. yield curve remained inverted after the interest
rates on three-month Treasury bills moved above the
yields on 10-year notes for the first time since
mid-2007 last Friday.
    This market phenomenon, which has preceded every U.S.
recession over the past 50 years, triggered a dramatic selloff
in stock markets across the globe late last week and a stampede
into longer-dated U.S. government debt, putting some pressure on
the greenback.
    Still, the selling in dollars has been modest as the U.S.
economic expansion is still on track to reach a record-long run
later this year, despite evidence of flagging since late 2018,
analysts said.
    "There is a reluctance to buy dollars, while the bar for
selling dollars has been relatively high because people have
been burned before," said Steven Englander, global head of G10
FX research at Standard Chartered Bank in New York. 
    At 11:35 a.m. (1535 GMT), an index that tracks the greenback
against a basket of major currencies was up 0.08 percent
at 96.643. It touched 96.734 earlier on Tuesday, which was near
a 1-1/2 week peak.    
    The dollar held its ground despite a government report that
showed U.S. developers broke ground for single-family homes at
the slowest pace in over 1-1/2 years in February.
    The Conference Board said its gauge on American consumers'
mood dipped to 124.1 in March, falling short of a 132.0 forecast
of analysts polled by Reuters.
    The euro slipped on Tuesday, reversing some of Monday's
gains tied to a stronger-than-forecast German business
confidence survey.
    The euro was down 0.17 percent at $1.1293.
    The euro has remained in a range of $1.12 to $1.16 in 2019
despite a slowdown in the euro zone economy that has prompted
fresh stimulus from the European Central Bank.
    With the dollar mixed across the board, risk appetite
recovered, helping to lift the Australian dollar, the
Swedish crown and the Norwegian crown. 
    On the other hand, reduced safe-haven bids caused the yen to
fall 0.54 percent to 110.56 per dollar.
    Meanwhile, sterling gained 0.28 percent after two
eurosceptic lawmakers indicated they could agree to support
British Prime Minister Theresa May's EU withdrawal deal rather
than risk the British parliament canceling Brexit altogether.
    British lawmakers will vote later Wednesday on a range of
options, giving parliament a chance to indicate whether it could
agree on a deal with closer ties to Brussels and then try to
push the government in that direction. 
    Currency bid prices at 11:38AM (1538 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1291        $1.1311     -0.18%         -1.55%      +1.1327     +1.1281
 Dollar/Yen       JPY=        110.5500       109.9500    +0.55%         +0.26%      +110.6800   +109.9500
 Euro/Yen         EURJPY=     124.84         124.39      +0.36%         -1.09%      +125.0100   +124.3700
 Dollar/Swiss     CHF=        0.9934         0.9923      +0.11%         +1.22%      +0.9952     +0.9918
 Sterling/Dollar  GBP=        1.3232         1.3202      +0.23%         +3.72%      +1.3261     +1.3160
 Dollar/Canadian  CAD=        1.3374         1.3401      -0.20%         -1.93%      +1.3420     +1.3372
 Australian/Doll  AUD=        0.7144         0.7111      +0.46%         +1.35%      +0.7146     +0.7108
 Euro/Swiss       EURCHF=     1.1220         1.1225      -0.04%         -0.30%      +1.1248     +1.1218
 Euro/Sterling    EURGBP=     0.8532         0.8570      -0.44%         -5.03%      +0.8595     +0.8520
 NZ               NZD=        0.6915         0.6905      +0.14%         +2.95%      +0.6924     +0.6895
 Dollar/Norway    NOK=        8.5236         8.5316      -0.09%         -1.33%      +8.5480     +8.5154
 Euro/Norway      EURNOK=     9.6261         9.6523      -0.27%         -2.83%      +9.6590     +9.6280
 Dollar/Sweden    SEK=        9.2197         9.2382      -0.38%         +2.85%      +9.2500     +9.2147
 Euro/Sweden      EURSEK=     10.4126        10.4525     -0.38%         +1.45%      +10.4640    +10.4130

 (Additional reporting by Tom Finn in LONDON and Shinichi
Saoshiro in TOKYO; Editing by Bernadette Baum)
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