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FOREX-U.S. dollar rises as caution reigns ahead of key central bank meetings

    * Focus on central bank meetings this week
    * Dollar index gains for 3rd day
    * Dollar up vs yen, hits highest since June
    * Bitcoin comes off highs hit over weekend 

 (Adds new comment, bullets, FX table, updates prices, changes byline, dateline; previous LONDON)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 15 (Reuters) - The dollar gained for a third straight session on Monday, as traders cut
their bearish bets on the greenback to four-month lows amid the recent rise in U.S. Treasury yields and grew
cautious ahead of key global central bank meetings.
    The Federal Reserve, Bank of England, and Bank of Japan are all set to meet this week and will likely
set the tone as to where global rates are headed.
    U.S. Treasury yields, however, were lower on Monday in line with Europe, ahead of these central bank
gatherings. Benchmark 10-year Treasury yields traded as high at 1.639% on Monday, close to
Friday's top of 1.6420%, a level last seen in February 2020. 
    Gains in the greenback were more pronounced against low-yielding currencies such as the euro and
the British pound while high-yielding currencies like the Australian dollar fared
relatively better.
    "The U.S. dollar has been one of the best-performing G10 currencies in recent weeks reflecting a shift
in expectations regarding Fed interest rate policy," said Jane Foley, senior FX strategist, at Rabobank in a
research note.
    "Since the reflation trade is centered around U.S. fiscal policy and growth expectations, the U.S.
dollar could prove to be more resilient than the consensus had been expecting at the start of the year." 
    Rising U.S. yields have lifted the greenback 2% so far this year thanks to widening interest rate
differentials relative to other major bond markets. The dollar declined more than 4% in the last quarter of
2020.
    In mid-morning trading, the dollar index, which tracks the U.S. currency against six major peers,
was up 0.2% at 91.68 . It hit a late November 2020 high of 92.51 last week.
    The U.S. currency has been supported by declining bets for its decline, with speculators cutting net
short positions to the lowest since mid-November in the week ended March 9.        
    Rising bond yields will continue to focus minds this week before a Fed meeting at which some analysts
expect policymakers to strike an optimistic tone on the U.S. economy.
    While there are some expectations that the Fed might try to calm bond markets - yields have risen some
60 basis points since the last Fed meeting - the consensus view is Fed Chief Jerome Powell will not make
changes to policy.    
    "The Fed is not expected to tinker with its monetary policy but instead communicate via forecasts that
the situation is under control and that markets are running way ahead of themselves," SEB analysts said in a
note.
    The greenback rose 0.2% against the yen to 109.19, after earlier climbing to 109.36 yen, the
highest since June 2020. 
    The euro weakened 0.3% to $1.1920 after rising last week for the first time in three weeks as
latest data showed hedge funds slashed their net euro positions. 
    The Australian dollar - viewed widely as a liquid proxy for risk appetite - fell 0.4% to
US$0.7725, extending Friday's Loss.
    Bitcoin, meanwhile, weakened 3.3% after surging to a record high of $61,781.83 over the weekend.

    
    ========================================================
    Currency bid prices at 10:29AM (1429 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 91.8610        91.6800     +0.21%         2.089%        +91.8900    +91.5370
 Euro/Dollar                  $1.1921        $1.1953     -0.27%         -2.43%        +$1.1968    +$1.1917
 Dollar/Yen                   109.2150       109.0200    +0.19%         +5.75%        +109.3550   +108.9300
 Euro/Yen                     130.19         130.29      -0.08%         +2.58%        +130.4800   +130.0400
 Dollar/Swiss                 0.9293         0.9296      -0.02%         +5.06%        +0.9312     +0.9278
 Sterling/Dollar              $1.3896        $1.3970     -0.52%         +1.72%        +$1.3948    +$1.3895
 Dollar/Canadian              1.2485         1.2475      +0.08%         -1.96%        +1.2500     +1.2442
 Aussie/Dollar                $0.7730        $0.7758     -0.35%         +0.49%        +$0.7775    +$0.7722
 Euro/Swiss                   1.1077         1.1107      -0.27%         +2.50%        +1.1108     +1.1071
 Euro/Sterling                0.8575         0.8588      -0.15%         -4.05%        +0.8589     +0.8555
 NZ                           $0.7184        $0.7177     +0.10%         +0.04%        +$0.7216    +$0.7180
 Dollar/Dollar                                                                                    
 Dollar/Norway                8.4730         8.4395      +0.39%         -1.33%        +8.4840     +8.4140
 Euro/Norway                  10.1042        10.0750     +0.29%         -3.47%        +10.1150    +10.0431
 Dollar/Sweden                8.5330         8.4783      +0.37%         +4.11%        +8.5474     +8.4691
 Euro/Sweden                  10.1717        10.1338     +0.37%         +0.95%        +10.1912    +10.1339
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by
Catherine Evans, Alexander Smith and Andrea Ricci)
  
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