The dollar jumps to its highest level in nearly five years
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The dollar hit a nearly five-year high against the Japanese yen on Tuesday, buoyed by a jump in Treasury yields as traders bet an early rate hike from the Federal Reserve despite a spike in COVID-19 cases.
The US currency rose to 115,815 yen for the first time since January 3. 11, 2017, as long-term Treasury yields jumped 12.5 basis points overnight to 1.6420%.
Full US money markets were priced in the first rate increase by May, and two more by the end of 2022.
The dollar index, which measures the currency against the yen and five other major peers, settled near a one-week high of 96.328 reached on Monday.
The euro was trading at $1.1302, up from a one-week low of $1.12795 from overnight.
The British pound fell to $1.34685, retreating to the overnight low of $1.3431.
The Australian dollar hovered near a two-week low of $0.7184 reached in the previous session.
While the significant increase in coronavirus cases caused by the Omicron variant continued to affect global travel and public services, delaying the reopening of some US states. Schools after the holiday, investors remained optimistic that the closure would be avoided. Read more
And on Monday, the US Food and Drug Administration authorized the use of a third dose of the Pfizer and BioNTech COVID-19 vaccine for children ages 12 to 15, and reduced the time for all booster shots to five months from six months after the initial doses.