On February 9, the U.S. dollar declined to its lowest in a week as investors started entertaining doubts about the scale of a recent rally driven by anticipation of the fastest pandemic recovery in the U.S.
Furthermore, the most popular cryptocurrency, Bitcoin, hit a record above $47,000 as it increased by nearly 20% overnight. The surge came as Tesla announced it had purchased $1.5 billion Bitcoin.
In the Asian session, the U.S. dollar index declined by 0.2% and settled at 90.75. It fell to 90.963 for the first time since February 1.
Since Friday, the greenback has been in retreat when disappointing jobs data knocked the wind out of a two-week run that had lifted it to a more than two-month high of 91.6.
Investors had pushed up the dollar thanks to a faster U.S. vaccine rollout relative to most other countries.
Many analysts believe that massive fiscal spending and continued ultra-easy Federal Reserve monetary policy reduce the greenback in the longer term.
Europe’s ‘delaying’ vaccination program will cap the euro near-term
According to Commonwealth Bank of Australia currency analyst Joseph Capurso, Europe’s ‘delaying’ vaccination program will cap the euro near-term. He said that in summer 2021, the single currency could rally to $1.28 for the first time since 2014.
On Tuesday, the euro boosted by 0.2% and touched $1.20775. Significantly, it hit a two-month low of $1.9520 on Friday.
Meanwhile, the British sterling increased to $1.3784 for the first time since May 2018. The pound last traded up 0.3% at $1.3774.
The American currency declined by 0.3% against the yen and settled at 104.925. At the end of the last week, it stood at 105.765, a level unseen since October 2020.
Elsewhere, Tesla accelerated Bitcoin rising by saying in its 2020 annual report on Monday that it had purchased $1.5 billion of Bitcoin as part of its broad investment policy. Moreover, Tesla announced that it should begin accepting the digital asset as payment for its products.
The dominant cryptocurrency Bitcoin traded at $46,400 after pushing a new record at $47,565.86 on Tuesday.
The world’s second-largest cryptocurrency Ethereum traded at $1,733.15 after hitting a record at $1,784.85 on Monday.
The risk-sensitive currencies, the Australian and New Zealand dollars, also witnessed gains. The Aussie boosted by 0.3% and settled at 77.252 U.S. cents while kiwi surged 0.4% and touched 72.47 U.S. cents.