Connect with us

Hi, what are you looking for?


Dollar loses some steam after Fed boost; bitcoin tumbles By Reuters

Dollar edges higher after U.S. inflation data as traders await Fed meet By Reuters

© Reuters. FILE PHOTO: A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/File Photo

By Iain Withers

LONDON (Reuters) – The dollar dipped on Monday against major currencies, but broadly held most of the previous week’s gains after the Fed’s surprise hawkish tilt.

The lost momentum after a leap of 1.9% last week – the most since March 2020 – as the U.S. Federal Reserve signalled a sooner-than-expected end to its ultra-easy monetary policy.

The index, which tracks the greenback against six major currencies, fell 0.2% to 92.074 from a high of 92.405 reached on Friday, a level not seen since April 13.

The Fed’s hawkish shift has weighed on markets since, although risk sentiment improved somewhat on Monday, reflected in European stock markets turning positive.

Among currencies gaining ground was sterling, up 0.6% at $1.3877, after shedding more than 2% versus the dollar the previous week.

The euro also gained around a quarter of a percent, at $1.18960. The yen was last up 0.2%, shedding some earlier gains.

“The Fed’s hawkish policy shift has brought an abrupt end to the recent period of low volatility and narrow trading ranges for G10 FX,” currency analysts at MUFG said in a note.

“The Fed has encouraged market participants to price in more rate hikes into next year lifting US short rates and the USD.”

The Fed’s policy stance has become a tailwind for the dollar and will be a challenging backdrop for risk assets, Westpac analysts said.

While the dollar index has the scope to test highs reached in March after its recent gains, “there’s not enough juice for a sustained medium-term breakout beyond that”, they added.

Analysts at Goldman Sachs (NYSE:) agreed the dollar’s gains may not be sustained, noting other central banks will need to consider policy normalisation too as their economies recover from the blow of the pandemic.

In cryptocurrencies, bitcoin’s poor recent run continued with an 8% drop below $33,000, as China expanded restrictions on mining to the province of Sichuan.

Cryptomining is big business in China, accounting for more than half of global bitcoin production.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Cybercriminals Adopt the Blockchain to Broadcast confidential Messages A group of analysts from SophosLabs represents that programmers working the crypto-jacking malware, Glupteba, have been...


PUBG unban in India soon as PUBG Corp. Will The Government Of India Unban PUBG? PUBG Mobile was Ban in India, PUBG organization has...


A standard method to execute Bitcoin could be powerless against double-spending, the new examination has found. Blockchain sleuths at ZenGo, a wallet startup, have...

BlockChain News

HDD mining, also known as “storage mining”, is a process of obtaining cryptocurrency based on hard disk memory. Compared with traditional POW mining, hard...