VINACHEM

The dollar strengthened for a fifthday against a basket of major peers as an agreement to start de-escalating the conflict in Ukraine sent stocks higher and pushedTreasuries down the most in a month.

Russia’s ruble led gains by emerging-market currencies asinvestors became more comfortable owning higher-returningassets. The backup in Treasury yields bolstered the appeal ofthe securities to international investors, who need to own U.S.currency to purchase the assets. The yen reversed gains versusthe dollar. The pound reached the highest level in more thanfour years versus the greenback after data yesterday showed theU.K. jobless rate fell.

“Fear in the market is steadily declining,” Sebastien Galy, a senior currency strategist at Societe Generale SA in New York, said in a phone interview. “Dollar-yen mechanically moveshigher with higher Treasuries yields. The tendency for dollar-yen to drift higher is definitely there.”

The Bloomberg Dollar Spot Index, which tracks the U.S.currency against 10 major peers, rose 0.1 percent to 1,010.68 at5 p.m. New York time and touched 1,010.87, the highest levelsince April 8. It erased an earlier decline of 0.2 percent, itsbiggest drop since April 9.

The dollar gained 0.2 percent to 102.39 yen and touched102.47, the highest since April 8. It fell as much as 0.4percent earlier. The greenback was little changed at $1.3814 pereuro after also falling 0.4 percent earlier. The euro gained 0.1percent to 141.44 yen.

Financial markets in the U.S., U.K., Germany, Hong Kong, Singapore, Hong Kong and Australia are among those that will beshut for public holidays tomorrow.

Yields Increase

Treasury yields climbed after four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first stepstoward easing tensions in the conflict. Pro-Russian separatistshave seized Ukrainian government buildings and NATO estimates40,000 troops are massed on the border.

U.S. 10 - year yields increased as much as 10 basis points,the most since March 19, to 2.72 percent.

The ruble gained 1.1 percent to 35.6124 per dollar andrallied 1.3 percent to 41.6032 against the central bank’s targetbasket of dollars and euros.

Russian President Vladimir Putin “didn’t say anything todisturb the markets, and no bad news is now good news,”Vladimir Miklashevsky, strategist at Danske Bank A/S inHelsinki, said in e-mailed comments.

The Standard & Poor’s 500 Index of U.S. equities rose asmuch as 0.4 percent after falling 0.3 percent earlier. It endedthe day up 0.1 percent.

Volatility Falls

JPMorgan Chase & Co’s G-7 Volatility Index dropped to 6.64percent, the least since July 2007 on a closing basis and downfrom a record 27 percent in October 2008, shortly after thecollapse of Lehman Brothers Holdings Inc.

The pound rose as much as 0.3 percent to $1.6842, thestrongest since November 2009, before trading little changed at$1.6794. The government reported yesterday the U.K. unemploymentrate dropped below the 7 percent threshold Bank of EnglandGovernor Mark Carney set as an initial guide for considering aboost in interest rates.

The U.K. central bank will release next week the minutes ofits April policy meeting, where it left interest rates at arecord-low 0.5 percent.

“The move in sterling follows yesterday’s strongemployment numbers,” said Alvin Tan, a foreign-exchangestrategist at Societe General SA in London. “On top of that, wehave a general dollar retreat. It’s pretty clear the Fed is inno hurry to hike rates.”

Yuan Advances

China’s yuan advanced the most in more than a week to6.2190 per dollar after the government said it will lowerreserve-requirement ratios at some rural banks, fuelingspeculation authorities will act to stabilize growth.

The nation will cut the percentage of deposits that“qualified” rural banks must set aside as reserves to free upfunds for lending to agriculture-related industries, thegovernment said in a statement late yesterday.

South Africa’s rand was the biggest winner after the rubleamong emerging-market currencies after Federal Reserve ChairJanet Yellen said yesterday the U.S. central bank has a“continuing commitment” to support the U.S economy.

“The larger the shortfall of employment or inflation fromtheir respective objectives, and the slower the projectedprogress toward those objectives, the longer the current targetrange for the federal funds rate is likely to be maintained,”the central-bank chief said.

The rand snapped a five-day losing streak, strengthening0.8 percent to 10.4865.