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Ten-year U.S. Treasury yields rose more than 20 basis points
over the past four weeks to a one-month high, increasing demand
for U.S.-denominated assets.
Broader market moves were limited as financial markets re-opened
after the Easter holiday.
The dollar index against a basket of six other currencies rose
to 97.39, edging toward the 2019 high of 97.71 struck in early
March.
"We are in a very range-bound market with the broader picture
being more positive for the dollar relative to the euro after
the weak eurozone PMI manufacturing data last week," said Ulrich
Leuchtmann, head of FX strategy at Commerzbank.
Data released overnight showed U.S. existing-home sales fell
more than expected in March. Figures for new-home sales will be
released later in the day.
Those may provide some pointers to the state of the U.S.
economy. A clearer picture should emerge from Friday's gross
domestic product report.
Support for the dollar came amid a general drop in market
volatility. Expected moves in the euro/dollar exchange rate over
a one-month period held near a five-year low of 4.50 vol.
Speculative long positions on the U.S. dollar reached their
highest since December 2015 last week, according to calculations
by Reuters and Commodity Futures Trading Commission data
released on Friday.
"That lack of vol is going to keep investors looking for yield
and will do nothing to help the euro, or the yen for that
matter. Both are helped by valuation, but that leaves them stuck
in tight ranges," Societe Generale strategists said.
The dollar's moves against the euro and sterling were small,
with the single currency lower at $1.1243 and the pound up at
$1.2986.
(GRAPHIC: G10 FX implied volatility - https://tmsnrt.rs/2DuX9tt)
(Reporting by Saikat Chatterjee; editing by Larry King)
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