iifl-logo

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

Fed Hawks Circle as Inflation Looms, Dollar Flexes

10 Jan 2024 , 08:58 AM

In cautious trading on Wednesday, the dollar remained stable ahead of U.S. inflation data that is expected later this week and might impact the Federal Reserve’s policy. Meanwhile, bitcoin saw volatility following the market tremors caused by a spoof social media post.

According to the U.S. securities regulator, a phony message claiming that it has authorized exchange-traded funds (ETFs) for bitcoin was briefly posted on its X social media account. Spot bitcoin exchange-traded funds (ETFs) have not yet received SEC approval, according to the agency.

Following the phony post, bitcoin shot up to a new 21-month high of $47,897, but it quickly crashed to below $45,000 as the SEC removed and denied the content.

The largest cryptocurrency in the world was down 0.5% at $45,897 last time. In the last two months, the price of bitcoin has increased due to anticipation of a favourable ruling on ETFs by the SEC, which is expected to attract billions of new investments.

The dollar continued to lead the currency market; the dollar index, which compares the value of the US dollar to six competitors, was last seen at 102.53 on Tuesday, up 0.215% from the previous day.

After falling 2% in December, the index is up 1% this month as investors reevaluate how abrupt and severe the Fed’s rate cuts are likely to be.

The market’s views of easing were boosted last month by the Fed’s unexpectedly dovish stance in December, when it forecast 75 basis points (bps) of rate cuts in 2024. Traders were expecting as much as 160 bps of cuts.

Since then, markets have reevaluated the likelihood and are now pricing in 140 basis points of cuts this year.

In order to gauge the chance of a rate cut in March, traders will be concentrating on the release of the U.S. consumer price index report on Thursday. It is anticipated that the report would demonstrate a 0.2% monthly increase in headline inflation and a 3.2% annual increase.

According to the CME FedWatch tool, there is a 64% chance that the Fed will ease in March based on Fed funds futures, down from 80% one week prior.

In other words, the sterling was up 0.03% on the day at $1.2709, while the euro was down 0.05% to $1.0926. The value of the Japanese yen fell by 0.19% to $147.74.

To $0.669, the Australian dollar increased by 0.16%. 

November saw a dramatic decline in core inflation in Australia and a slowdown in overall inflation that was closer to a two-year low. These less-than-expected results supported market expectations that interest rates would not need to climb further.

To $0.624, the New Zealand dollar weakened by 0.02%.

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

The 10 Strongest Currencies In The World – Forbes Advisor

Related Tags

  • Dollar
  • Euro
  • FED
  • FOREX
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.