By Stephen Culp

NEW YORK (Reuters) – The dollar rose on Wednesday as rising Treasury yields and upbeat economic data helped the greenback gain ground against a basket of world currencies.

Bitcoin touched a record high of $51,721, a day after the cryptocurrency crossed the $50,000 level for the first time. That brought its total market capitalization to more than $900 billion, as traders bet on its further acceptance among major companies.

U.S. retail sales and producer prices data blew past analyst estimates, signaling a stronger-than-expected economic recovery from the pandemic recession as vaccine deployment gains momentum.

“We had a rather strong retail sales data and PPI is firming up, providing another round of economic data that supports the belief that the reflation trade is not going away and that inflation is approaching us,” said Edward Moya, senior market analyst at OANDA in New York.

Rising U.S. bond yields also gave the dollar a boost, with the 10-year yield rising as high as 1.333% from around 1.20% at the end of last week.

“The dollar in the short term is going to benefit from yields,” Moya said “Long-term, we’re talking about a weaker dollar, but in the short term we could see further strength as yields remain elevated.”

“Everyone is going to want to ride this trade until we hear from (U.S. Federal Reserve Chairman Jerome) Powell next week,” Moya added.

The dollar index, a measure of the currency’s strength against six other major currencies, recovered from Tuesday’s three-week low of 90.117 to last stand 0.26% higher at 90.943.

The yen, which is sensitive to U.S. yields, reacted the most with the dollar, jumping to as high as 106.21 yen in Asian trade, its highest since September, before retreating to 105.90 .

The euro slipped 0.5% to $1.20.

The positive mood on the economic outlook is underpinning risk-sensitive currencies.

The British pound fell 0.3% to $1.39 , having reached its highest level since April 2018 on Tuesday.

The Australian dollar fell 0.19% to $0.77 .

(Refiling to restore dropped word “as” to headline)

(Reporting by Stephen Culp; additional reporting by Ritvik Carvalho; editing by Jonathan Oatis)