Dollar firm

LONDON: The dollar held firm near a five-month high on Wednesday helped by gains in long-term U.S. Treasury yields, while the euro shrugged off reports that a possible future Italian government would seek debt forgiveness from the European Central Bank.

The dollar index versus a basket of six major peers stood at 93.240 after rallying to 93.457 overnight, its highest since Dec. 22. It was 0.03 percent lower than Tuesday.

The U.S. currency has gained since mid-April and clawed back most of its 2018 losses after a reassessment of the path of U.S. monetary policy versus other countries.

Moves by China and the United States to avoid a full-blown trade war have allowed investors to focus on the yield advantage the United States enjoys over other countries.

The dollar rally stalled last week after weaker-than-expected April U.S. inflation data but was lifted on Tuesday when strong U.S. consumer spending numbers sent 10-year Treasury yields surging to a seven-year peak of 3.095 percent. "Today could see a repeat of yesterday. Momentum would certainly seem to back a further dollar advance with little to stop U.S. 10-year Treasury yields pushing to 3.20 percent," said ING FX strategist Viraj Patel.