NEW YORK (CNN/Money) -
The euro rose to new highs against the beleaguered dollar in technically motivated trading Tuesday while bonds turned in a mixed performance.
With sentiment toward the greenback still heavily bearish and oil's climb back above $50 a barrel dragging bond yields lower, there was little resistance to the euro's advance.
"There was a lot of options-related stuff going on," Ronald Simpson, managing director of global currency analysis at Action Economics, a research firm in New York, told Reuters.
"Oil is having a bit of an impact in the Treasury market, yields have come off a bit, and that coincided with the rally in euro/dollar," he added.
In late afternoon trading Tuesday, the euro traded at $1.3082, up from $1.3043 late Monday.
The dollar, however, gained strength against the yen, buying ¥103.35, up from ¥103.20 late Monday.
The dollar began to slide after Federal Reserve Chairman Alan Greenspan said Friday the U.S. current account gap is unsustainable, reaffirming a belief that the U.S. wants a weaker dollar to help ease its deficit.
The recent Group of 20 finance meeting intensified the fall after ministers offered no strong measures to halt the greenback's decline.
Nervousness in Asian currency markets also pressured the dollar, with the head of Japan's largest business lobby saying the yen would hurt long-term corporate earnings if it became too strong. He added it would be difficult to curb its strength against the dollar through intervention.
In the bond market, the benchmark 10-year note fell 2/32 of a point to 100-15/32 to yield 4.19 percent, up slightly from 4.18 late Monday. The 30-year bond gained 5/32 of a point to 107-29/32 to yield 4.84 percent, down from 4.85 on the session. Bond prices and yields move in opposite directions.
The two-year note was unchanged at 99-4/32 to yield 2.96 percent, and the five-year note lost 2/32 to yield 3.58 percent.
-- from staff and wire reports
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