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Dollar Near 5-Month High after Benchmark Treasury Yield Jumps Above 3 Percent

Dollar Near 5-Month High after Benchmark Treasury Yield Jumps Above 3 Percent

The dollar was near a five-month high against a group of major currencies on Wednesday, as a jump in the benchmark 10-year Treasury yield above 3 percent reignited a rally that had lost steam last week.

The dollar index versus a basket of six major peers was at 93.270 after rallying to 93.457 overnight, its highest since Dec. 22. It was still 0.05 percent higher than Tuesday.

The dollar has gained since mid-April as easing tensions in the Korean Peninsula and moves by China and the United States to avoid a full-blown trade war allowed investors to focus on the yield advantage the United States enjoys over other countries.

The advance stalled last week after weaker-than-expected April U.S. inflation data, but regained traction overnight as strong U.S. consumer spending numbers sent long-term Treasury yields surging to a seven-year peak of 3.095 percent.

The 10-year Treasury yield had hovered around 3 percent since late last month on concerns about rising inflation and a ballooning federal budget gap. But until Tuesday, it was unable to convincingly break above 3 percent.

The euro slid 0.05 percent to $1.1833 after brushing $1.1815, its weakest since late December.

The dollar edged down 0.05 percent to 110.285 yen, having risen to 110.450 overnight, its strongest since Feb. 5.

The yen barely budged after data showed Japan's economy contracted for the first time in nine quarters during January-March.

The pound was slightly weaker at $1.3501 after slipping to $1.3452 on Tuesday, its lowest since Dec. 29.

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