He dollar global hovered near a three-week high against its major peers on Monday, ahead of a week of central bank meetings in which markets expect the Federal Reserve cut interest rates but signal a measured pace of easing by 2025.
For its part, Bitcoin surged above $105,000 for the first time, boosted by signs that President-elect donald trump will move forward with a possible strategic reserve of bitcoin.
The euro was up 0.13% on the day at $1.0517, after falling to $1.0453 at the end of last week, its lowest level since Nov. 26, hit by the unexpected rating downgrade of France by rating agency Moody’s on Friday. The decline in business activity in the euro zone eased this month, a survey showed on Monday, Reuters said.
He dollar indexwhich tracks the evolution of this currency against six others, was stable at 106.83 during the morning, after rising to 107.18 on Friday for the first time since November 26.
Expectations for the Fed meeting
Operators trust that the Fed will cut the rate by a quarter point on Wednesday, but now expect officials to forego a cut in January, according to CME’s FedWatch tool.
In view of the fact that the inflation remains above the central bank’s 2% annual target, the authorities of the Fed have stated that the recent rallies are part of a bumpy path toward lower price pressures and not a reversal of the disinflationary trend. But analysts say they are also likely to worry about renewed inflation as Trump takes office in January.
“The US economy has been resilient in the face of high interest ratesmeaning the potential for inflation to rise if the economy overheats is an issue the Fed will have to address,” said James Kniveton, a senior currency trader at Convera.
“There is concern that the incoming administration’s policies could be inflationary, but as the Bank of Canada governor commented earlier this month, decisions cannot be based on potential US policy, and (the Fed chair) Jerome Powell can follow their example,” he added.
In fact, investors expect that the Fed’s outlook this week will not incorporate possible future policy changes. “Powell will likely emphasize that it is still too early for officials to factor major policy changes from the new Trump administration into their outlook,” Deutsche Bank analysts said in a note.
Bitcoin remains on the rise waiting for Donald Trump’s economic strategy
Bitcoin rose as much as 3.6% from Sunday’s close to hit an all-time high of $106,533, but had fallen to $104,503 in early European trading.
Trump suggested in an interview with CNBC late last week that he planned to move forward with a proposal to build a strategic bitcoin reserve in the United States, similar to its strategic oil reserve. During the election campaign, Trump had promised to turn USA in “the crypto capital of the planet.”
“The CNBC interview has been a bit of a slow burn, but it has now resulted in that push above $105,000” for Bitcoin,” said IG analyst Tony Sycamore. “We are in blue sky territory here, and the The next figure the market will look for will be $110,000,” he added.
Source: Ambito
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