Dollar Slips as Investors Await Fed Policy Cues, Bitcoin Surges

4 Mar 2024 , 09:29 AM

Due to pressure from declining Treasury yields, the US dollar declined on Monday as traders awaited additional important economic data that may provide new information about when the Federal Reserve will cut interest rates.

Significant inflows into cryptocurrency exchange-traded funds propelled Bitcoin to a peak exceeding two years in duration.

After rising 0.33% on Friday, the euro remained stable ahead of Thursday’s anticipated European Central Bank policy decision.

As investors attempted to determine whether the Bank of Japan will soon abandon its negative interest rate policy, the yen remained close to the heavily watched 150 per dollar mark.

Early Asian trade saw a 0.07% decrease in the dollar index, which measures the value of the dollar against six main rivals, including the euro and yen. This move brought the index closer to the lower end of the previous month’s range, which was 103.43-104.97.

Following some dismal industrial and construction spending statistics on Friday, the index dropped by 0.26%.

The dollar lost more support as a result of this, and Treasury yields also declined, with the benchmark 10-year yield falling to 4.178% for the first time in two weeks. Monday saw the yield hovering at 4.19%.

In other news, the euro barely moved, hovering around the upper end of its current range at $1.08425.

The majority of economists predict that the European Central Bank (ECB) will lower interest rates initially at its June meeting, but they will be watching Christine Lagarde’s press conference for further hints on the timing.

At $63,500, it was trading 1.5% higher than it was on Sunday. Earlier, it had reached $64,284.75, the strongest level since November 2021—the month it reached its record high of $68,999.99.

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