Currencies Overview: The Dollar holds Onto Gains as The US Jobs Report Approaches

The dollar held on to its biggest gains in more than two months against the major counterpart currencies on Friday, January 8th, as high US bond yields abandoned some bets on the dollar’s decline.

The US currency rebounded from its lowest level in nearly three years, while traders reaped profits against the euro in particular after the dollar index fell about 7% in 2020 and up to 0.9% in the new year in light of a fiscal stimulus in the United States.

Democrats won de facto control of the Senate this week, giving President-elect Joe Biden room to pass more spending, what analysts say would be a negative for bonds and the dollar.

The yield on the benchmark 10-year bond exceeded 1% on Wednesday for the first time since March.

Investors are currently awaiting the US nonfarm payrolls report, due for release later today, for indications on whether more stimulus is needed to keep the economic recovery going.

Was little changed on the dollar index at 89.859 in Asian trading, after it fell to almost a three-year low of 89.206 on Wednesday. The index rose more than 0.5% on Thursday, but is still heading for a weekly decline.

The euro nearly settled at $ 1.22605, after falling 5% on Thursday.

Also little changed in the risk-sensitive Aussie dollar, at 77.70 US cents, after falling 0.5% in the previous session.

The US currency reached 103.900 yen, after rising 0.7% and closing at 108,830 in New York.

Bitcoin, the most popular digital currency in the world, rose to a high of $ 40,420 on Thursday, less than a month after it surpassed the $20,000 level on December 16.