SINGAPORE - The dollar traded near a two-week high against a basket of major currencies on Monday, bolstered by rising U.S. bond yields, while easing concerns over global political risks weighed on the safe haven yen.
The dollar's index against a basket of six major peers stood at 90.445 in early Asian trade, within sight of a two-week high of 90.477 set on Friday.
Rising U.S. bond yields helped underpin the greenback, with the U.S. 10-year Treasury yield touching a peak of 2.968 percent , the highest since January 2014 in early Asian trade. That was up about 2 basis points from late U.S. trade on Friday.
That move came after U.S. Treasury yields pushed higher last week, as Federal Reserve officials signalled further interest rate increases in 2018 based on evidence of steady U.S. growth.
Against the yen, the dollar hit a two-month high of 107.89 yen, and last changed hands at 107.85 yen, up 0.2 percent from late U.S. trade on Friday.
The yen tends to attract demand in times of economic uncertainty and market turmoil, and sell off when confidence returns.
North Korea said on Saturday it would immediately suspend nuclear and missile tests, scrap its nuclear test site and pursue economic growth and peace instead. It made these comments ahead of planned summits with South Korea and the United States.
"The dollar momentum...is probably going to carry the way at least until the next negative headline comes out," said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.
Even traders who had been bearish on the dollar seem to be looking for opportunities to take long positions, with the greenback seen underpinned for now by higher U.S. bond yields, Innes added.
Besides concerns over geopolitical risks, worries over U.S.-China trade tensions also appear to be waning, Innes said.
U.S. Treasury Secretary Steven Mnuchin said on Saturday he may travel to China, a move that could ease tensions between the world's two largest economies, as international policymakers acknowledged Beijing needs to change its trade practices.
On Sunday, China's commerce ministry said it would welcome U.S. officials to discuss trade and economic issues.
The dollar also held firm against the euro, with the common currency slipping 0.2 percent to $1.2266.
On Friday, the euro had touched a two-week low at $1.2250 as investors trimmed long positions in the euro ahead of this week's European Central Bank policy meeting at which policymakers are largely expected to signal no change in policy.
Sterling last changed hands at $1.4010, up 0.1 percent on the day. Last week, it fell 1.7 percent, its biggest weekly drop since the early part of February.
The pound fell last week on weaker-than-expected inflation and retail sales data and comments from BOE Governor Mark Carney on Thursday, which traders interpreted as the BOE's being less committed to raising rates in May due to recent "mixed" data.
That pull-back in sterling came after investors pushed the pound to $1.4377 on April 17, its highest level since the Brexit referendum in June 2016, in part because of growing expectations the BoE would increase interest rates in May to curb inflation. (Reporting by Masayuki Kitano; Editing by Sam Holmes)
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