FOREX-Dollar back in vogue on firmer U.S. yields, CAD at 4-yr low

Wed Jan 15, 2014 7:02am EST
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* Dollar recovers as U.S. retail sales halt slide in U.S. yields

* Yen weakens, Australian dollar also suffers

* Canadian dollar hits four-year low

By Anirban Nag

LONDON, Jan 15 (Reuters) - The dollar index gained for a second straight day on Wednesday, helped by firmer U.S. yields that pulled the greenback away from a one-month low against the yen and sent the Canadian dollar to a fresh four-year low.

Traders said U.S. yields , which correlate with the dollar index, were helped by upbeat retail sales. The data offset Friday's disappointingly soft payrolls and halted a two-day slide in U.S. Treasury yields.

The dollar index was up 0.25 percent at 80.858, with gains seen across the board. It was up 0.1 percent at 104.35 yen , building on Tuesday's recovery, when it rallied more than 1 percent to pull away from a near one-month low of 102.85.

The euro was down 0.4 percent against the dollar at $1.3625 while growth-linked currencies also weakened. The Australian dollar fell 0.6 percent to $0.8910 while the dollar rose to a four-year high against its Canadian counterpart of C$1.0992. Option barriers were cited at C$1.10 which were capping the dollar's rise for now, traders said.

"It is mostly a dollar move higher and we like the yen weakening some more especially against the dollar," said Alvin Tan, currency strategist at Societe Generale.   Continued...