As investors prepared for a busy week that includes a rate decision by the European Central Bank, testimony by Federal Reserve Chair Jerome Powell before Congress, and U.S. jobs data, the dollar weakened versus a basket of currencies on Tuesday. The data also revealed that growth in the U.S. services industry had slowed.
Tuesday saw a record high for Bitcoin before an abrupt drop during a volatile session. Due to investor money flooding U.S. spot exchange-traded cryptocurrency products and the possibility of a decline in global interest rates, the largest cryptocurrency in the world has increased by about 50% so far this year.
Bitcoin was last down 7.04 % to $ 62,745.23, after rising as high as $ 69,202.
The Institute for Supply Management (ISM) reports that February saw a slight slowdown in the growth of the U.S. services industry due to a drop in employment. Data revealed that, in January, new orders for items made in the United States fell more than anticipated.
Stuart Cole, the chief economist at Equiti Capital, stated, “The ISM numbers today showed growth in the service sector slowed in February, in no small part due to a decline in employment levels, and that has raised some concerns about the strength of the U.S. economy.”
The dollar index, which compares the value of the currency to six important rivals, fell 0.04% to 103.8. Most significant currency pairings are traded within well-known ranges.
“The G10 FX world remains incredibly subdued,” stated Michael Brown, a market analyst at London-based online broker Pepperstone.
“There’s some reluctance from most market participants to trade with conviction ahead of Powell tomorrow, ECB on Thursday, and of course NFP (nonfarm payrolls) on Friday, which is probably exacerbating the quiet conditions at the start of the week,” he stated.
Better-than-expected U.S. economic data has boosted the dollar index, which gauges the value of the dollar against a basket of six other currencies. However, the currency’s climb has halted in recent sessions as investors wait for clarity on Fed policy. The index is up around 2.3% for the year.
When Chairman Powell speaks before Congress on Wednesday and Thursday about inflation and the economy, he is expected to reiterate the Fed’s position that it wants to wait for further evidence before reducing interest rates.
“We should expect Fed Chair Powell to reiterate patience and emphasize (there is) no hurry to cut rates,” according to Christopher Wong, a currency analyst at OCBC in Singapore.
When the ECB meets on Thursday to discuss policy, it is generally anticipated that interest rates will remain at a record 4%. Investors will closely monitor revised economic estimates and watch for any clues as to when rates could begin to decline.
According to survey data released on Tuesday, the euro zone’s economic activity began to rebound last month. At $1.08515, the euro was down 0.04% compared to the dollar.
The employment statistics for February in the United States might shock markets on Friday. Although hiring is predicted to have slowed last month, a higher-than-expected total might contribute to the dollar’s increase this year.
The National People’s Congress of China continued to target a 3% budget deficit and 5% economic growth, with no surprise in the news released. Nomura analysts stated that without more stimulus, meeting the growth objective will be difficult. At $ 7.2117, the offshore yuan showed minimal movement.
The dollar dropped 0.4% vs the yen to 149.925, further losing ground on the high of 150.85 set last week.
A greater break would allow the market to reach its peak in November at 151.92, but it would also increase the possibility of Japanese intervention.
The pound gained 0.09% to $1.2702 on Wednesday, ahead of the British budget. Jeremy Hunt, the finance minister, has been trying to calm down rumors of significant tax cuts ahead of the election.
- Published By Team Genuine Reporter