Dollar recovers but diversification plays weigh

London

THE dollar edged higher on Thursday after plumbing a three-year low hit earlier in the session as higher US Treasury yields prompted some investors to pare bearish bets against the greenback.

A wary outlook capped gains, however, amid ongoing weakness in the dollar.

With global investors including sovereign wealth funds and central banks looking to diversify their dollar holdings into other currencies such as the euro, market watchers say the dollar's late…