By Yasin Ebrahim Investing.com – The dollar hit two-month highs on Thursday, but its revival is nothing but “noise” and will eventually fade as US Treasury yields dry up, Citi said. The, which measures the strength of the dollar against a trade-weighted basket of six major currencies, was up 0.46 %% to 91.53. “While we recognize the possibility of a stronger USD in a shorter period of time, we remain steadfast in our belief that 2021 will be a weak year for the USD,” Citi said in a note. The dollar has found its foothold in the recent surge in U.S. Treasury yields as investors gamble on vaccine-driven recovery and stifled demand in a post-pandemic world that drives inflation. . The 5- to 30-year Treasury curve, an indicator of the health of the economy, widened to levels not seen since March 2016. “CitiFX Technicals also describes the crossroads the markets are at. Developments that are indicative of Inflationary rather than reflationary dynamics can create additional short-term turmoil. Afterwards, we could see a brief uptrend in nominal returns that could tactically embolden the dollar, “Citi added. But not everyone on the street seems willing to jump on the bearish dollar train. Bank of America (NYSE 🙂 said a refocusing on fundamentals, including relative rates in currency markets, will likely support the dollar for the year amid a rally in US government bond yields. “Changes in factors support our thesis that improving US fundamentals will provide a tailwind for the US dollar, increasing the risk of a rally as the year progresses,” BofA said.