Dollar languishes near 3-month lows, bitcoin perks up

By David Henry and Iain Withers

NEW YORK/LONDON (Reuters) - The dollar languished near four-month lows against major currencies on Monday as bets on a robust global economic recovery continued to support currencies seen as riskier.

The dollar index moved around the 90 mark, down 0.26% on the day in morning trading in New York, slightly above a four-month low on Friday of 89.646.

Since the end of March, the greenback, seen as a safe-haven trade, has retreated steadily with optimism about the global economic recovery. But lately that move down seems to have slowed as traders begin to anticipate higher U.S. interest rates coming when the U.S. Federal Reserves reacts to signs of increasing inflation.

"Markets have to start pricing in a slightly more hawkish Fed going forward," Win Thin, global head of currency strategy at Brown Brothers Harriman wrote on Monday morning.

Data due on Friday, including U.S. personal consumption and inflation figures, could move the markets to anticipate a more hawkish tone from the next Fed policy meeting on June 15-16. But for now, Thin said, "the dollar is coming under some modest pressure as the week begins."

Yields on benchmark 10-year U.S. Treasury notes were steady around 1.61% on Monday morning.

Traders are also watching for progress on a new stimulus package in the United States, after the White House pared down its infrastructure bill to $1.7 trillion on Friday but failed to gain Senate Republican backing.

Among the currencies gaining on the dollar was the euro, up 0.34% to $1.222. The single currency has gained around 4% on the greenback since March as Europe has moved to catch up with the United States in vaccinating its people and reviving its economy.

Cryptocurrencies fought back on Monday, retaking ground lost during a bout of weekend selling that was fueled by further signs of a Chinese crackdown on the emerging sector.

Bitcoin rebounded 8% to $37,629, but was still down after crashing in recent days, falling as much as 17% to $31,107 on Sunday.

Bitcoin halved in value just weeks after April's record peak of $64,895, undermining the case for its mainstream acceptance.

The catalyst for Sunday's slump was that cryptocurrency "miners," who mint cryptocurrencies by using powerful computers to solve complex math puzzles, were halting Chinese operations in the face of increasing scrutiny from authorities.

Ether, the second-largest cryptocurrency, rose 14% to $2,385, about half of its high two weeks ago.

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Currency bid prices at 10:00AM (1400 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

89.7860 90.0330 -0.26% -0.217% +90.1080 +89.7970

Euro/Dollar

$1.2223 $1.2182 +0.34% +0.05% +$1.2224 +$1.2172

Dollar/Yen

108.7750 108.9600 -0.17% +5.28% +108.9900 +108.7000

Euro/Yen

132.94 132.70 +0.18% +4.74% +133.0400 +132.5300

Dollar/Swiss

0.8959 0.8979 -0.19% +1.30% +0.9002 +0.8960

Sterling/Dollar

$1.4162 $1.4159 +0.03% +3.67% +$1.4171 +$1.4113

Dollar/Canadian

1.2053 1.2064 -0.08% -5.34% +1.2085 +1.2052

Aussie/Dollar

$0.7749 $0.7730 +0.27% +0.76% +$0.7751 +$0.7706

Euro/Swiss

1.0949 1.0936 +0.12% +1.31% +1.0964 +1.0932

Euro/Sterling

0.8630 0.8605 +0.29% -3.44% +0.8649 +0.8603

NZ

Dollar/Dollar $0.7207 $0.7162 +0.64% +0.38% +$0.7210 +$0.7158

Dollar/Norway

8.3425 8.3925 -0.53% -2.78% +8.3875 +8.3390

Euro/Norway

10.1970 10.2146 -0.17% -2.58% +10.2192 +10.1620

Dollar/Sweden

8.3166 8.3200 +0.27% +1.47% +8.3397 +8.3111

Euro/Sweden

10.1655 10.1380 +0.27% +0.88% +10.1698 +10.1317

(Reporting by David Henry in New York and Iain Withers in London; Editing by Will Dunham)