Dollar Nears 3-Week High, Bitcoin Hits $105K

16 Dec 2024 , 10:04 AM

Amid expectations that the Federal Reserve will lower interest rates this week and subsequently suggest a gradual pace of reduction for 2025, the U.S. dollar lingered near a three-week peak against key rivals on Monday.

With indications that President-elect Donald Trump may move forward with a possible strategic bitcoin reserve, Bitcoin surged beyond $105,000 for the first time.

The Bank of Japan is leaning towards forgoing a rate hike on Thursday, according to Reuters and other news sites, which caused the yen to struggle to recover after its worst week since September.

Following data on Friday that revealed an unexpected GDP decline, sterling was also under pressure. Only a few hours after the BOJ, the Bank of England is scheduled to make a policy announcement.

The rising U.S. Treasury yields provided further support for the currency. According to CME’s FedWatch tool, traders are now expecting policymakers to forego a rate decrease in January, but they are still sure of a quarter-point Fed rate cut on Wednesday.

Fed policymakers have said that recent increases are a part of the rocky road to less price pressures and not a reversal of the disinflationary trend, even though inflation is still above the central bank’s 2% annual objective.

However, with Trump expected to enter office in January, economists say they are also likely to be cautious of fresh inflation.

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