By Saikat Chatterjee

LONDON (Reuters) – The U.S. dollar held at three-week lows on Tuesday as traders unwound some of their bullish bets on the U.S. economy’s outlook after weak surveys data last week.

U.S. consumer sentiment unexpectedly fell in early February amid growing pessimism about the economy among households with annual incomes below $75,000, according to a University of Michigan survey. A separate Reuters survey showed slower jobs growth in the coming months. and

As a result, a Citigroup economic surprise index for the United States fell to its lowest level since early January and was just shy of a eight month low, suggesting hopes for a quick U.S. economic recovery may be stretched.

“Until the middle of last week, I was getting tons of research on the U.S. economic rebound and the dollar strength and some of those positions may be unwound,” said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank.

Against a basket of its rivals, the greenback weakened 0.2% to 90.13, its lowest level since Jan. 26. It has fallen 1.5% over the past eight trading sessions.

The latest dollar weakness was more noticeable as it was against a broader backdrop of rising U.S. Treasury yields, a factor that was previously supportive of the greenback.

The dollar selling mood also dragged on the safe-haven Japanese yen, which fell through its 200-day moving average against the dollar and struck multi-year lows against the euro, Aussie and Swiss franc.

Sterling, extended gains to hit $1.3946, its highest level since April 2018 as Britain rolls out its vaccination programme to the next target groups. The currency has gained almost 3% from early-February lows. [GBP/]

“Things right now reflect greater comfort with the story of a synchronised global recovery, which is why we are seeing a weaker dollar,” said Bank of Singapore currency analyst Moh Siong Sim.

The euro rose 0.3% higher to $1.2166 to re-test recent resistance at that level. Rising oil prices lifted the Canadian dollar and Norwegian crown to multi-week highs. [O/R]

The Chinese yuan slipped 0.1% to 6.4132 per dollar after the Financial Times reported Beijing was exploring curbs on rare earth mineral exports in order to hurt the U.S. firms that use them.

The dollar traded near milestone lows against other currencies. The risk-sensitive Australian dollar hit a one-month high of $0.7802 and the kiwi made a five-week peak of $0.7257. [AUD/]

(Reporting by Saikat Chatterjee; Editing by Alison Williams)