FOREX dollar retreats, heading for biggest weekly loss since mid-January; bitcoin down

(Adds commentary, weekly milestones; updates prices) * US services sector data shows flat growth in February * Bitcoin, ether fall in Silvergate fallout * Dollar on track for worst week since mid-January vs. yen * Dollar may resume uptrend next week on U.S. jobs data analyst By Gertrude Chavez-Dreyfuss NEW YORK, March 3 (Reuters) – The U.S. dollar fell from a 2-1/2-month high against the Japanese yen on Friday, at headed for its biggest weekly loss since mid-January against a basket of six major currencies as traders pulled back to gauge the path of Federal Reserve policy. Analysts said the market has mostly priced in the prospect of a higher terminal rate after the recent uptick in positive US economic data. The yen, which is sensitive to long-term interest rate differentials between the US and Japan, looked set to end its six-week losing streak against the dollar as it was boosted by US 10-year yields retreating from a near four-month high near 4.1% . Cryptocurrencies, on the other hand, took a beating as the crisis surrounding Silvergate Bank worsened, with industry heavyweights such as Coinbase Global and Galaxy Digital dropping the lender as their banking partner. The dollar index, which measures the greenback’s value against six major currencies, fell 0.3% to 104.60, from as high as 105.36 at the start of the week, its strongest level since January 6. So far this week, the index has fallen 0.5%, on pace for the biggest percentage drop since the week of January 15. The dollar briefly pared losses after data showed the U.S. services sector grew steadily in February, with new orders and employment rising to more than one-year highs. The Institute for Supply Management’s (ISM) non-manufacturing index fell to 55.1 from 55.2 in January. “The dollar has essentially had four full weeks of gains that completely erased the losses in January,” said Juan Perez, director of trading at Monex USA in Washington. “As markets look to wrap up a tough Q1, optimism is growing as the focus shifts from the pain of inflationary pressures to the potential for a prosperous second half despite central bank tightening via interest rates.” Analysts polled by Reuters said recent dollar strength was likely to be temporary and the currency would weaken later this year as the global economy improves and on expectations that the Fed will stop raising interest rates well before the European Central Bank. However, the dollar seems unlikely to reverse its recent uptrend, said Karl Schamotta, market strategist at Corpay in Toronto. “Next week’s job openings and non-farm payrolls reports could generate a boost in yields and the dollar. Traders are likely to move cautiously, especially in currencies exposed to more dovish local central bank messages – namely the Australian, Canadian dollar and yen.” Bank of Japan ( The BOJ), meanwhile, is expected to begin dismantling extraordinary stimulus measures after Governor Haruhiko Kuroda retires next month. Tokyo inflation data for February exceeded the BOJ’s target for a ninth month, but the core measure eased from a 42-year high. The dollar fell 0.4% to 136.26 yen, after climbing to 137.10 on Thursday, its highest since Dec. 20. For the week, the dollar was down 0.4% against the yen, its worst weekly showing since mid-January. The euro rose 0.3% to $1.0628, after starting the week at a near two-month low of $1.0533. Sterling rose 0.7% against the dollar to $1.2032, on course for a 0.4% gain on the week, its best weekly performance since January 20. The pound’s rise came as Britain struck a post-Brexit trade deal with Northern Ireland with the EU, while a survey showed Britain’s services sector grew at its fastest pace in eight months in February. Bitcoin fell 4.9% to $22,306, after hitting a 2-1/2-week low of $22,000. Ether declined 5.4% to $1,559 after touching $1,543.60, its lowest since mid- February. ================================================= ====== Currency bid prices at 15:00 (2000 GMT) Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid Previous Change Increased Dollar Index 104.5100 104.9600 -0.41% 0.986% +105.01.01.50 $ +105.0401.501 $1.0598 +0.33% -0.76% +$1.0636 $1.0589 Dollar/Yen 135.8500 136.7800 -0.67% +3.62% +136.7650 +135.8100 Euro/Yen 144.45 144.92 -0.32% +2.96% +145.0400 +144.3000 Dollar/Swiss 0.9362 0.942% +1.940 +1.9424 -0.940 .9360 Sterling/Dollar $ 1.2044 $ 1.1948 +0.82% -0.40% +$ 1.2046 +$ 1.1945 Dollar/Canadian 1.3592 1.33350%% +0.31% +11.364 +1.355630630.6730.620620 -60.6730. 620.620.620.620.620.620.620.620.620.620.620.67.620.620.620.620.67.620.6720.67220.67.6720.67220.6206222222 -dollars. $ 0.6725 Euro/Switzerland 10.3860 10.4360 -0.39% +5.92% +10.4610 +10.3950 Euro/Norway 11.0477 11.0500 -0.02% +5.28% +11.0900 +11.0416 1 Dollar/Sweden 0.462 .5073 -0.06% +0.52% +10.5271 +10.4630 Euro/Sweden 11.1260 11.1322 -0.06% -0, 21% +11.1533 +11.1225 (Reporting by Gertrude Chavez-Dreys; Additional reporting by Samuel Indyk in London and Kevin Buckland in Tokyo; Editing by Christopher Cushing, Kim Coghill, Louise Heavens, Christina Fincher and Richard Chang)