NEW YORK: The dollar gained for a fourth consecutive day on Tuesday after a recent spike in bond yields challenged the market consensus for dollar weakness in 2021, while riskier currencies rose as bond markets calmed and stocks recovered.

Rising yields have spooked markets in recent weeks, with participants worried that an economic recovery from the impact of the COVID-19 pandemic, combined with fiscal stimulus, could cause a jump in inflation and potentially faster tightening from the Federal Revere than previously anticipated.

The rising volatility has benefited the greenback as investors unwind trades.

Short US dollar positions were last at $29.33 billion, according to data by the Commodity Futures Trading Commission.

The dollar index rose 0.09% to 91.089, after earlier reaching a three-week high of 91.396.

The Australian dollar gained 0.39% to $0.7802 versus the US dollar, but remains below the three-year high of $0.8007 reached on Thursday.

The greenback was last down 0.48% against the krone at 8.520 krone, but is holding above the 8.313 krone per dollar level reached last week, the weakest for the dollar in more than two years.

The Swiss franc hit its lowest since November 2020 against the dollar at 0.9193.

The yen was the weakest since August at 106.95.

The euro also fell after top European Central Bank officials sounded the alarm over the rises in bond yields. The single currency was last down 0.10% at $1.2037.

Bitcoin dipped 1.12% to $49,097. Citi said in a report that the popular cryptocurrency was at a “tipping point” and could become the preferred currency for international trade.