The U.S. dollar declined versus some of the major currencies. This happened as new signs of weakness in the U.S. job market appeared. Tepid inflation numbers dented investor anticipations about the pace of economic rebound from the epidemic.
However, currency moves were confined to narrow ranges due to holidays in Japan and China.
Furthermore, BNY Mellon became the latest firm to adopt cryptocurrencies. Hence, the largest cryptocurrency, Bitcoin, reached a new all-time high of $49,000 on February 12. The company will form a new unit to support clients hold, transfer, and issue digital assets.
The American currency remained week on Friday in Asia and stood close to two-week lows. This was driven by the announcement of weaker-than-anticipated weekly U.S. jobless claims data the previous day.
On Wednesday, a jobless claims report revealed that U.S. core inflation last month was zero, while market expectations were 0.2%.
Furthermore, Jerome Powell, Fed Chair, announced that the central bank’s new policy framework could hold annual inflation over 2% for some time before increasing rates. This will strengthen market anticipations of a weak greenback trend.
Some analysts say that the U.S. dollar has recently become more sensitive to interest rate anticipation. Over the past year, risk appetite managed the dollar’s direction: growing as a safe-haven when there’s political and financial stress and decreasing in times of global expansions.
The dollar index increased by less than 0.1% and settled at 90.49
The U.S. dollar index increased by less than 0.1% and settled at 90.49 in holiday-thinned trade due to the Lunar New Year. Significantly, the American currencies dropped by 0.6% during the week.
This year, the traders were uncertain over how U.S. President Joe Biden’s planned $1.9 trillion fiscal stimulus package will change the greenback.
According to Westpac strategists, the U.S. economy will outperform most because of fiscal stimulus and swifter vaccine deployment. However, they say that ongoing reflationary fiscal and monetary policy will leave the dollar index on a sustained medium-term bear trend.
The euro declined by less than 0.1% and stood at $1.212. However, it boosted by 0.6% during the week.
Against the yen, the U.S. dollar was mostly flat and stood at 104.795 yen. Remarkably, from the end of last week, it dropped by 0.5%.
The dominant cryptocurrency was trading 1.7% lower and was at $47,170 after trading at a record high of $49,000 on Bitstamp.
Furthermore, the digital currency is on course for an approximately 22% weekly advance. This will be its biggest since the period ended January 3.