Updated March 4th, 2024 at 08:32 IST

Dollar softens ahead of Fed signals; Bitcoin surges to two-year high

Bitcoin reached a more than two-year high amid major inflows into cryptocurrency exchange-traded funds.

Reported by: Business Desk
Dollar | Image:Pexels
Advertisement

Dollar softens: The US dollar edged lower on Monday, influenced by declining Treasury yields, as investors awaited crucial economic data for insights into the potential timing of Federal Reserve interest rate adjustments.

Bitcoin reached a more than two-year high amid major inflows into cryptocurrency exchange-traded funds.

Advertisement

The euro maintained strength after Friday's 0.33 per cent increase, with attention turning to the European Central Bank's policy decision scheduled for Thursday.

The yen hovered close to the closely monitored 150 per dollar threshold, as market participants evaluated the possibility of the Bank of Japan's departure from its negative interest rate policy, potentially as early as this month.

Advertisement

The dollar index, which gauges the currency against six major counterparts including the euro and yen, dipped 0.07 per cent to 103.79 in early Asian trading, approaching the lower end of the 103.43-104.97 range observed over the past month.

Friday saw the index decline by 0.26 per cent following weak manufacturing and construction spending data, further weighing on Treasury yields.

Advertisement

The benchmark 10-year yield dropped to 4.178 per cent, its lowest level in two weeks, before stabilising around 4.19 per cent on Monday.

According to Westpac strategists, the market sentiment appears to lean towards testing range support ahead of crucial macroeconomic releases and Fed Chair Jerome Powell's congressional testimony.

Advertisement

However, any deviation in data would likely signal another buying opportunity, maintaining the dollar index within its existing range.

Key events this week include manufacturing and services ISM readings on Tuesday, with the highlight being Friday's release of monthly payroll figures.

Advertisement

Meanwhile, the dollar slipped 0.09 per cent against the yen to 149.99, as traders weighed cautious remarks from BOJ Governor Kazuo Ueda against hawkish statements from BOJ board member Hajime Takata.

The euro remained relatively stable at $1.08425, near the upper end of its recent trading range. Economists anticipate the ECB may consider rate cuts at its June meeting, seeking additional clarity from ECB President Christine Lagarde's press conference.

Advertisement

Bitcoin traded approximately 1.5 per cent higher from Sunday at $63,500, reaching $64,284.75 earlier, its strongest level since November 2021, the same month it hit its record high of $68,999.99.

(With Reuters Inputs)

Advertisement

Published March 4th, 2024 at 08:32 IST