Dollar Soars, Eyes Fed for Next Move

22 Nov 2024 , 10:19 AM

Bitcoin approached the $100,000 mark on Friday, but the U.S. dollar remained at a 13-month high as investors evaluated the prospects for the Federal Reserve’s interest rate path and European concerns kept the euro weak.

Expectations that U.S. President-elect Donald Trump’s policies could rekindle inflation and restrict the Fed’s capacity to lower rates have caused the dollar to rise by almost 3% so far this month.

In the meantime, the yen maintained its value relative to the US dollar as domestic core inflation data continued to surpass the Bank of Japan’s (BOJ) 2% objective, indicating that the conditions for additional interest rate increases were deteriorating.

With little data this week to dampen its March upward, the dollar index slipped 0.05% to 107.01, not far from Thursday’s one-year high of 107.15, its highest mark since Oct. 4, 2023.

The Fed has the leeway to lower interest rates in December since it is taking longer for the unemployed to find new employment, according to data released overnight that showed the U.S. weekly initial jobless claims unexpectedly fell to a seven-month low.

The spotlight will be on the U.S. PCE for October, which is set to be released next Friday.

Fed officials, including Chair Jerome Powell, have recently hinted that the central bank may slow down its rate-cutting trajectory.

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