Mar 14 2024 In London, the dollar made slight gains on Thursday as investors anticipated key U.S. economic data, while bitcoin surged to a new all-time high above $73,800.
The dollar index, measuring the currency against six major counterparts, increased by 0.1% to 102.83.
Despite Tuesday’s release of higher-than-expected U.S. consumer inflation figures, the dollar has remained relatively steady, reflecting a roughly unchanged stance since the data. Year-to-date, the index has risen by approximately 1.5% on the back of resilient U.S. economic indicators, prompting investors to temper expectations for swift and significant interest rate cuts.
Scheduled for release at 1230 GMT (8.30 a.m. ET), upcoming data on producer inflation, retail sales, and weekly jobless claims could offer further insights into the timing of potential rate adjustments.
Francesco Pesole, FX strategist at ING, commented, “Today’s data in the U.S. will be quite important… in a quiet market environment. That’s surely going to be the big event today.” He emphasized the current transitional period, with focus shifting to central bank meetings scheduled for the following week.
Next week will witness interest rate decisions by the Bank of Japan on Tuesday, the Federal Reserve on Wednesday, and the Bank of England on Thursday.
Meanwhile, the euro saw a minor decline to $1.0942, lacking significant European economic data to spur volatility, marking a year-to-date decrease of around 0.9%. Sterling edged up 0.1% to $1.2811, representing a 0.6% increase for the year.
Bitcoin’s ascent continued, reaching a record high of $73,803, fueled by exchange-traded bitcoin funds and optimism surrounding potential Fed rate cuts this year.
Against the yen, the dollar remained relatively stable at 147.75, reflecting losses of 2% over the past two weeks as investors positioned themselves for the possibility of the Bank of Japan lifting interest rates out of negative territory at its upcoming meeting.
Reports suggest that Japan’s central bank may discuss ending negative rates if negotiations with large corporations result in substantial wage increases. Preliminary outcomes of the spring wage talks are anticipated on Friday, with several major companies already agreeing to meet union demands for wage hikes.
In other developments, the dollar advanced by 0.1% against the Swedish crown, reaching 10.239 crowns, following data revealing a slower-than-expected headline inflation rate in Sweden for February.
Market sentiment on Thursday indicated traders foresee a roughly 75% probability of the Fed implementing rate cuts by June.