© Reuters.

By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia as rising U.S. Treasury yields and a bigger-than-expected rise in U.S. consumer prices accelerated fears about runaway inflation and lent support to the U.S. currency.

The that tracks the greenback against a basket of other currencies inched up 0.04% to 90.718 by 11:09 PM ET (3:09 AM GMT).

The pair inched up 0.01% to 109.66, rising above the 109 mark and with the dollar close to its strongest level against the yen in five weeks.

The pair inched up 0.03% to 0.7728 and the pair edged up 0.20% to 0.7170.

The pair inched down 0.05% to 6.4535 while the pair inched up 0.09% to 1.4064.

The dollar also held onto its 0.6% gain against the euro from the previous session, trading at $1.2083 earlier in the Asian session. The greenback also climbed to 0.9083 against the Swiss franc, near a one-week high.

U.S inflation data released on Wednesday said that consumer prices rose to their highest level in 12 years, with the increasing demand as the economy continues to re-open pushing against supply constraints.

The rose 0.9% month-on-month in April, higher than the 0.3% growth in forecasts prepared by Investing.com. The CPI rose 0.8% and 4.2% .

“The move in the dollar was fueled by the upward surprise in consumer prices, but also because the market was caught on the short side,” Barclays (LON:) foreign exchange strategist Shinichiro Kadota told Reuters.

The dollar could continue its upward trend as investors unwind their bearish bets on the currency. This would reposition it for a period of more sustained inflation as more and more countries continue their economic recovery from COVID-19.

“This market is aware of the potential for further upside surprises to inflation. This will support the dollar,” Barclay’s Kadota added.

Investors now await the and data for April, both due later in the day. Further data on consumer prices, including , is due on Friday.

Meanwhile, benchmark 10-year U.S. Treasury yields rose to a five-week high of 1.7040% after an auction for the notes on Wednesday saw strong demand.

According to other investors, signs of a recovering labor market and increased consumer spending could be more evidence that inflationary pressure will pick up, which could push yields and the dollar even higher.

continued a tumble triggered by a tweet from Tesla (NASDAQ:) Inc. CEO Elon Musk on the cryptocurrency front. The tweet said that Tesla has suspended the use of bitcoin to pay for vehicles over environmental concerns. It also added that Tesla will not be selling any bitcoin.

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