Investing.com - The dollar took a breather on Tuesday after rising to seven week highs against a basket of the other major currencies, as a boost from rising Treasury yields faded.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged down to 90.62 by 08:13 AM ET (12:13 GMT), still within sight of an overnight high of 90.84, the strongest level since March 1.
The dollar had strengthened across the board on Monday as the yield on 10-year U.S. Treasury notes hit its highest in more than four years at 2.998%.
Yields climbed as strengthening inflation prospects added to expectations for a faster rate of monetary tightening from the Federal Reserve.
The yield backed off that level on Tuesday and was last at 2.971%.
The dollar was holding near ten-week highs against the safe haven yen, with USD/JPY last at 108.81 after surging 0.83% on Monday.
The Japanese currency, which is often sought in times of market turmoil and political uncertainty and tends to decline as investor confidence returns, has weakened in recent sessions as worries over geopolitical risks and trade tensions waned.
The euro was little changed, with EUR/USD last at 1.2214 after pulling away from a seven week low of 1.2185 set overnight.
The pound backed away from five-week lows, with GBP/USD edging up 0.14% to 1.3961, but gains were held in check as doubts over a prospective rate hike by the Bank of England next month weighed.
The dollar was weaker against its Canadian counterpart, with USD/CAD slipping 0.16% to 1.2829, off an earlier two-week high of 1.2861.
The Australian dollar rose to the highs of the day, with AUD/USD hitting 0.7621, while the New Zealand dollar was lower, with NZD/USD down 0.35% to 0.7126.