The dollar took a pause today in what has been a relentless climb higher as under-fire sterling as well as the euro and Japanese yen recovered some ground from multi-year lows.

Sterling climbed over 1% to $1.0810, on track for its biggest daily percentage gain in nearly seven weeks.

The euro rose 0.2% to $0.9629, and the dollar slid 0.3% against the yen to 144.28.

The decline in the dollar was broadly in line with a recovery in markets' sentiment towards riskier assets, which also boosted European stocks and US share futures, and was helped by US treasury yields steadying after their recent gains.

Today's moves were minor compared to the dollar's significant recent gains.

The euro was still near its 20-year trough hit a day earlier, and the yen was just off its 24-year nadir hit last week before Japanese authorities intervened to strengthen the currency.

Sterling was not too far from its record low of $1.0327 hit yesterday, the end of a plunge that began Friday when markets were spooked by Britain's gambit of relying on unfunded tax cuts to spur growth.

Sterling's falls also sent short-term gilt yields up 100 basis points in two days.

The Bank of England said yesterday that it would not hesitate to change interest rates and was monitoring markets "very closely", though did not take any immediate action.

Broad fundamentals are still pointing to a stronger dollar in the medium term.

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"Everyone's got this hope that the dollar is peaking and peaking and peaking, but it's just been far too premature," said Paul Mackel, global head of FX research at HSBC.

"The Fed is firmly hawkish and global growth is weakening, and you put those forces together alongside higher elements of risk aversion - it's all pointing to a strong dollar if not a strengthening dollar."

The dollar index was at 113.6, down 0.5% on the day, but still near its 20 year top of 114.58 hit the day before.

The Aussie and kiwi, which hit two and a half lows yesterday, were also on the rebound, with the Aussie up 0.57% to $0.6490 and the kiwi up 1.2% to $0.5702.

Bitcoin, which also often moves in line with risk sentiment, hit a 10-day top and was last up over 5% at around $20,200.