The dollar is falling as the rise in US bond yields stops

The dollar fell on Thursday as the rally in US Treasury yields stalled this week, while commodity-linked currencies such as the Canadian and Australian dollars rose amid rising commodity prices and optimism about global economic growth.

The euro and sterling rose gradually to catch a breath after they suffered the biggest losses in a month on Tuesday, when the dollar rose, supported by a jump in the yield on US bonds.

The euro last traded against the dollar at $1.1368, up 0.2 percent on the day. The pound rose 0.2 percent to $1.3636, while there was little change in the Japanese yen, recording 114.33 against the dollar.

The dollar index, which measures the performance of the US currency against a basket of major currencies, fell 0.2 percent during the session, recording 95.428.

The dollar rose in the past sessions, although it did not achieve the expected performance due to a significant increase in expectations that the Federal Reserve (the US central bank) will start raising interest rates by early March to curb inflation.

As for the rest of the currencies, the Australian and New Zealand dollars received support from the increase in commodity prices and expectations of tightening monetary policy.

The Australian dollar rose 0.3 percent, extending the gains of the previous session, while the Canadian dollar is heading towards its highest level in ten weeks, which it touched on Wednesday, when it recorded 1.2489 against the US dollar.