The dollar has weakened against various currencies due to a dip in Treasury yields as investors await key U.S. economic data before the Federal Reserve’s upcoming monetary policy meeting. The dollar index currently sits at around 105.57, having lost over 0.5% in the previous session, mainly due to the falling U.S. Treasury yields. This trend followed Federal Reserve Chairman Jerome Powell’s remarks on tightening financial conditions, pushing the benchmark 10-year yield above 5%. Simultaneously, Bitcoin has garnered attention as speculation grows regarding the approval of a bitcoin exchange-traded fund in the United States.
As market attention turns to the U.S. economic data ahead of the Fed’s meeting, the flash purchasing managers’ index (PMI) released on Tuesday and the gross domestic product (GDP) data due on Thursday are of particular interest. According to Matt Simpson, senior market analyst at City Index, the PMI data could set market expectations before the GDP report. The data could influence the direction of the dollar, potentially prompting a strong rally or breakdown. It’s essential to note that the Fed is expected to maintain rates at its upcoming meeting.
The European Central Bank is also expected to keep interest rates unchanged at their meeting following a 25-basis point increase in September. The euro, meanwhile, remains mostly flat at US$1.0665, holding gains against the dollar from the previous session.
The dollar’s retreat has given the battered yen some slight relief. The Japanese currency recently reached the sensitive 150-level, and traders see this as a potential trigger for Japanese authorities to intervene in the currency market. However, the data coming out of the United States this week could bring the yen back into the danger zone if it shows strength.
Kyle Rodda, senior financial market analyst at Capital.com, notes that the yen will be particularly sensitive to hot U.S. data, which may impact Treasury rates and, in turn, the yen’s value.
In cryptocurrency markets, Bitcoin has surged as much as 14% to a 2.5-year high of US$34,283. Notable figures like Robert Kiyosaki and Michael Saylor have made bullish predictions for Bitcoin’s future, emphasising its potential as a hedge against inflation and a profitable asset in the world of finance.
Economist Peter Schiff has expressed concern about the US dollar’s future. He predicts an inflationary slump, a prolonged recession, and decreased demand for the dollar, leading to a decrease in its value and higher Treasury rates. Schiff’s remarks may have contributed to some positive momentum for Bitcoin, as they are both negatively correlated.
Michael Saylor, founder and chairman of MicroStrategy, has highlighted the success of his company’s Bitcoin strategy. Since embracing Bitcoin as a treasury reserve asset in August 2020, Bitcoin has outperformed conventional assets, including the S&P 500, Nasdaq Composite, silver, and bonds. MicroStrategy continues to show strong support for Bitcoin by adding more units to its holdings.
Renowned author Robert Kiyosaki predicts the rise of gold, silver, and Bitcoin prices. He anticipates gold reaching beyond $2,100 and Bitcoin testing $30,000 before surging to an impressive $135,000. Kiyosaki believes that inflation may harm those who save with fiat currency and encourages investments in precious metals and cryptocurrencies.
A technical analysis of Bitcoin’s 4-hour chart reveals various price levels, including pivot points and resistance levels. The Relative Strength Index (RSI) indicates an overbought market, potentially leading to a reversal or pullback. The presence of the “Three White Soldiers” candlestick pattern and a double top pattern above the $30,300 level suggests a prevailing buying trend.
Overall, Bitcoin’s trend appears bullish, particularly if it surpasses the crucial $30,300 threshold. Traders are advised to monitor market forces closely as the situation unfolds.