The dollar held near a three-week high on Tuesday, as expectations global economies would unleash fresh stimulus and an improvement in appetite for riskier assets lifted yields on U.S. government bonds.

Yields on benchmark U.S. Treasuries pulled away from three-year lows as investors tip-toed back into riskier assets, lured by hopes for stimulus in major economies such as Germany and China, which eased more recent global recession fears.

Investor focus on Tuesday will shift to the first setting of China's new lending benchmark under its recent interest rate reforms, due at 01:00 GMT.

Risk appetite in global markets has been boosted this week by the prospect of Germany ditching its balanced budget rule to boost spending and China's interest rate reform plan, which is expected to lower corporate borrowing costs.

The greenback traded little changed at 106.620 yen following three straight sessions of gains, having moved away from a seven-month low near 105.000 reached last week.

Against the Swiss franc, a currency sought in times of market turmoil and political tensions along with the yen, the dollar hovered near a two-week high of 0.9820 franc scaled overnight.

The euro was flat at $1.1081, caught near a two-week trough of $1.1066 set on Friday.

The Australian dollar dipped 0.1% to $0.6757 against the broadly higher dollar.

Source : Reuters