NEW YORK, March 2 (Reuters) - The dollar dipped on Tuesday and riskier currencies including the Australian dollar gained as U.S. stocks were stable, reflecting improving risk appetite.

The greenback has been a beneficiary from recent volatility in stocks, which were roiled last week by a dramatic jump in U.S. government debt yields.

Treasuries have stabilized this week, with benchmark yields holding below last week's highs, helping to restore some market calm.

On Tuesday, "Wall Street largely retained Monday's sharp gains," which helped the U.S. currency "ease lower through the N.Y. session," Ronald Simpson, managing director, global currency analysis at Action Economics, said in a report.

The dollar index fell 0.31% to 90.731, after earlier reaching a three-week high of 91.396.

The euro gained 0.36% to $1.2092.

Rising yields came as participants worried that an economic recovery from the impact of the COVID-19 pandemic, combined with fiscal stimulus, will cause a jump in inflation and potentially faster tightening from the Federal Reserve.

The volatility also boosted the greenback as investors unwound short positions in the currency.

“If you do see volatility, the natural inclination is to take risk off the table; in this case it just basically means getting out of existing positions, and the dollar shorts are extremely elevated at this point” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.

Short U.S. dollar positions were $29.33 billion in the week ended Feb. 23, according to data from the Commodity Futures Trading Commission.

Riskier currencies including the Australian dollar continued to rebound from last week’s sell-off, with the Aussie also gaining after the Reserve Bank of Australia recommitted to keeping interest rates at historic lows.

The currency was last up 0.77% at $0.7831, though it remains below the three-year high of $0.8007 reached on Thursday.

Karen Jones, a technical analyst at Commerzbank, said that the Aussie and other risky currencies including the Norwegian krone appeared to be reversing from interim tops, which will likely be positive for the U.S. dollar near-term.

The “U.S. dollar bear trend is probably over” for now, Jones said in a report.

The greenback was last down 1.09% at 8.466 krone , but is holding above the 8.313 krone per dollar level reached last week, the weakest for the dollar in more than two years.

Safe-haven currencies including the Swiss franc and Japanese yen, meanwhile, ended slightly stronger, reversing earlier weakness.

The Swiss franc earlier hit its lowest since November 2020 against the dollar at 0.9193 while the yen was the weakest since August at 106.95.

Bitcoin fell to a session low after Gary Gensler, President Joe Biden's nominee to chair the U.S. Securities and Exchange Commission, said that cryptocurrency has raised new investor protection concerns.

It was last down 4.11% at $47,609.

Citi said in a report that the popular cryptocurrency was at a "tipping point" and could become the preferred currency for international trade or face a "speculative implosion."

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Currency bid prices at 3:23PM (2023 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 90.7310 91.0170 -0.31% 0.834% +91.3960 +90.7240

Euro/Dollar $1.2092 $1.2049 +0.36% -1.03% +$1.2094 +$1.1992

Dollar/Yen 106.7300 106.8800 -0.12% +3.35% +106.9500 +106.7150

Euro/Yen 129.05 128.61 +0.34% +1.68% +129.0600 +128.1900

Dollar/Swiss 0.9138 0.9148 -0.11% +3.29% +0.9193 +0.9138

Sterling/Dollar $1.3967 $1.3926 +0.30% +2.24% +$1.3976 +$1.3860

Dollar/Canadian 1.2610 1.2645 -0.26% -0.96% +1.2697 +1.2601

Aussie/Dollar $0.7831 $0.7772 +0.77% +1.81% +$0.7837 +$0.7737

Euro/Swiss 1.1050 1.1023 +0.24% +2.25% +1.1054 +1.1004

Euro/Sterling 0.8657 0.8651 +0.07% -3.13% +0.8667 +0.8638

NZ $0.7301 $0.7266 +0.50% +1.69% +$0.7306 +$0.7210

Dollar/Dollar

Dollar/Norway 8.4660 8.5590 -1.09% -1.41% +8.6270 +8.4660

Euro/Norway 10.2394 10.3100 -0.68% -2.17% +10.3790 +10.2268

Dollar/Sweden 8.3739 8.4235 -0.25% +2.17% +8.4703 +8.3752

Euro/Sweden 10.1263 10.1512 -0.25% +0.50% +10.1667 +10.1241

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(Additional reporting by Elizabeth Howcroft in London; Editing by Bernadette Baum and Jonathan Oatis)

((karen.brettell@thomsonreuters.com))