Business

Dollar Rises On US Recovery Hopes, Bitcoin Hits Near Record $52,640

[ad_1]

The dollar index was marginally changed at 90.943 on Thursday in Asia.

The dollar held its ground on Thursday after its first back-to-back gains in two weeks as upbeat data bolstered expectations that the US economy would recover from the coronavirus pandemic faster than most of its peers.

Bitcoin traded just shy of the new record high of $52,640 reached overnight, with its roughly 58 per cent surge this month prompting some analysts to warn that the rally might be unsustainable.

The world’s biggest digital currency, with a market capitalisation of over $900 billion, was fuelled by signs it is winning acceptance among mainstream investors and companies, such as Tesla, Mastercard and BNY Mellon.

Bitcoin was last up 6. 3 per cent at $52,233.

Despite the flurry of mainstream acceptance this year, some analysts warned that bitcoin was still far from becoming a widely used form of payment.

Government stimulus cheques helped US retail sales rebound sharply in January, while industrial output and producer prices data also provided robust upside surprises.

Investors expect a further boost from Joe Biden’s proposed $1.9 trillion Covid-19 relief package, with the president meeting top labour leaders on Wednesday to drum up support for the plan.

Meanwhile, minutes from the Federal Reserve’s policy meeting last month reinforced the central bank’s willingness to let the economy run hot while keeping monetary settings ultra-accommodative.

“Biden’s stimulus plans, a steep decline in new infections and rapid vaccine rollout leave the US well positioned to recover sooner than most,” Westpac strategists wrote in a client note.

“That will generate periodic bouts of USD upside.”

However, like many analysts, Westpac’s team expects the dollar to decline this year, weighed by the Fed’s relentless money printing.

The dollar index was little changed at 90.943 on Thursday in Asia after strengthening 0.2 per cent overnight and 0.4 per cent on Tuesday.

Newsbeep

The gauge has gained about 1 per cent this year, rebounding from an almost 7 per cent slide in 2020 that extended to a 2-1/2-year low of 89.206 in early January.

The rupee opened on a flat note and edged lower by 3 paise to 72.77 against the US dollar on in opening trade on Thursday amid a muted trend in the domestic equity market.

The rupee is likely to strengthen 1.3 per cent and average 73.5 against the US dollar in the financial year 2022-23 compared with an average level of 74.4 in the financial year 2021-22.

Westpac recommends fresh dollar index shorts on rallies toward 91.0.

The euro was little changed at $1.20385 after sliding 0.5 per cent overnight — the most in two weeks.

The dollar was almost flat at 105.845 yen, following a pullback Wednesday after reaching a five-month high of 106.225.

Treasury yields have given the dollar a boost in recent days, with the yield on the benchmark 10-year note rising as high as 1.333 per cent overnight from around 1.20 per cent at the end of last week. It pulled back in Asia on Thursday to 1.2669 per cent.

“Rising US yields have stopped the dollar from declining for now,” said Osamu Takashima, the Tokyo-based head of G10 FX strategy at Citigroup Global Markets Japan.

“In the longer term, we remain bearish on the US dollar: we expect a risk-on environment globally and under such circumstances we think downward pressure on the US dollar could revive.”

Takashima expects the dollar to rise to as high as 107 yen before slumping to 102 over the next three months.

[ad_2]

Source link

Sonal

Scoop Sky is a blog with all the enjoyable information on many subjects, including fitness and health, technology, fashion, entertainment, dating and relationships, beauty and make-up, sports and many more.

Related Articles

Back to top button