Dollar rally runs out power

SINGAPORE (Reuters) – The dollar nursed losses on Wednesday as a retreat in U.S. yields sapped momentum from its recent rebound and investors cautiously resumed bets that it can resume sliding.

Signal FX

Benchmark 10-year Treasury yields fell nearly 7 basis points from a 10-month high hit on Tuesday and the turnaround snuffed out a three-day streak for the dollar.

The Australian and New Zealand dollars rose from one-week lows, lifting the Aussie above 77 cents again to sit at $0.7680 and the kiwi over 72 cents to trade at $0.7226.

Signals in FX

The dollar fell through 104 Japanese yen to trade at 103.63 yen on Wednesday and the Chinese yuan also held gains to begin the day at a one-week high in offshore trade.

“The upward correction in the dollar index looks to be over and the downtrend has resumed,” ANZ analysts said in a note.

The euro steadied at $1.2208 and dollar index was steady at 89.991 on Wednesday after falling 0.5% on Tuesday. Sterling hit a week-high of $1.3680. Dollar Up Holds Onto Biggest Gains