Updated March 6th, 2024 at 08:29 IST

Dollar holds steady prior to Powell address, Bitcoin finds stability post-record high

Cryptocurrency markets saw Bitcoin slightly up but below its recent record high following a volatile overnight session.

Reported by: Business Desk
Dollar | Image:Pixabay
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Dollar in focus: Ahead of Federal Reserve Chair Jerome Powell's congressional testimony, the US dollar maintained stability on Wednesday, with traders exercising caution amid upcoming events including the European Central Bank rate decision and US jobs data later in the week.

Cryptocurrency markets saw Bitcoin slightly up but below its recent record high following a volatile overnight session. 

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The lack of catalysts kept the dollar within a narrow range, despite a slip overnight prompted by slower growth in the US services industry last month.

The upcoming February US jobs report on Friday is anticipated to be a litmus test for the rates outlook, potentially unsettling markets if it surprises positively. 

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Powell's testimony before Congress is eagerly awaited, with expectations that he will reaffirm the Fed's stance to await further data before considering rate adjustments.

Carol Kong, a currency strategist at the Commonwealth Bank of Australia, anticipates Powell to maintain the Fed's current stance, suggesting that it's unlikely to sway market expectations for a potential rate cut in June, which is currently priced in at around 60 per cent.

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The dollar index, measuring the greenback against a basket of major currencies, remained around 103.84. 

Meanwhile, the euro edged lower to $1.0846 ahead of the ECB rate decision, with markets keen on any hints regarding future rate adjustments and economic projections.

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While eurozone inflation remained resilient last month, Charu Chanana, head of currency strategy at Saxo, believes that downward revisions to inflation prints may pose risks to the euro but expects it to remain a buy on dips amid stabilising economic indicators.

Elsewhere, the British pound was slightly down ahead of the British budget announcement, while the Australian dollar held steady after weak fourth-quarter GDP data reinforced expectations for rate cuts. 

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The New Zealand dollar also slipped slightly against the greenback.

In the cryptocurrency sphere, Bitcoin's surge to a record high overnight caught market attention, but it retraced slightly afterward, indicating a breather following months of strong rallies amid increased investor interest and speculation on global interest rate trends.

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(With Reuters Inputs)

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Published March 6th, 2024 at 08:29 IST