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Dollar Retreats, Boosting Bitcoin Ahead of Key Decision

9 Jan 2024 , 09:48 AM

Tuesday’s dollar surge came to an end as traders maintained their bets for a wave of rate cuts from the Federal Reserve this year, believing that the United States’ inflation rate is adequately slowing down.

As more people were optimistic that the spot bitcoin exchange-traded funds (ETF) will soon be approved, the price of bitcoin in cryptocurrencies hovered around its highest level since April 2022.

Following a broad decrease in the greenback as U.S. Treasury yields dropped, the Japanese yen moved away from the 145 per dollar level, while the euro last traded at $1.0950, away from its previous three-week low of $1.0877.

The New York Fed’s most recent Survey of Consumer Expectations, which revealed that American consumers’ short-term inflation projections dropped to their lowest point in almost three years in December, partially explained the actions.

Later this week, a data on U.S. inflation is anticipated, which might shed more light on the extent of the Fed’s leeway in easing rates this year.

Futures indicate that the Federal Reserve will ease policy by around 140 basis points this year.

After rising 1% last week, the U.S. dollar decreased somewhat by 0.08% to 102.22 against a basket of currencies.

In tandem with the rise in the risk-averse Australian and New Zealand dollars, sterling increased by 0.04% to $1.2754.

The Australian dollar yesterday rose 0.04% to $0.6723, moving away from the $0.6641 three-week low it set last Friday. The kiwi increased by 0.05% to $0.6256 and was still quite far from its three-week low of $0.6182 on Friday.

Data released on Tuesday in Asia revealed that core inflation in the capital of Japan decreased in December for the second consecutive month, relieving some of the pressure on the Bank of Japan (BOJ) to quickly end its extremely loose monetary policy.

After the publication, the yen barely moved, closing at 143.975 per dollar, up 0.17%.

Bitcoin also moved in the vicinity of $47,000, peaking at $46,923 the previous session after scaling a 21-month high of $47,281 earlier in the day.

In a move that could lead to the U.S. securities regulator approving the proposed spot bitcoin ETF this week, a number of investment managers revealed on Monday the fees they intend to charge.

For feedback and suggestions, write to us at editorial@iifl.com

Currency - Overview, Origin, Foreign Exchange Trading

Related Tags

  • Bitcoin
  • Dollar
  • Euro
  • FOREX
  • Yen
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