The U.S. dollar headed for its first losing week during this month. Investors were concerned due to recent signs of weakness in the U.S. jobs market as it may hinder the pace of economic recovery from the pandemic.
Meanwhile, Bitcoin skyrocketed to a new all-time high of $49,000 on Friday. BNY Mellon announced that it would form a new unit to help clients transfer, hold, and issue digital assets. The company became the latest firm to embrace cryptocurrencies, at the same time boosting Bitcoin.
Jeffrey Wang, the head of Americas at crypto finance service provider Amber Group, noted that with names like BNY Mellon getting in, it would lay the groundwork for even more mainstream adoption of bitcoin and other digital coins. Currently, the crypto’s momentum is very strong, and the market may want to test $50,000.
Meanwhile, the dollar remained in the bearish territory on Friday in Asia, loitering near two-week lows. The release of weaker-than-expected weekly U.S. jobless claims data on Thursday pushed the currency in the red. It also added to recent concerns that the greenback’s previous rally had priced in too fast a pace of recovery for the U.S. economy.
On Friday, the dollar index climbed up less than 0.1% to 90.49 in holiday-thinned trade. However, it was still on track to plunge by 0.6% for the week.
What do the experts forecast about the dollar?
Traders’ views diverged this year over just how U.S. President Joe Biden’s planned $1.9 trillion fiscal stimulus package will affect the U.S. currency.
Some think that the new stimulus will bolster the currency as it should speed a U.S. recovery relative to other countries. Meanwhile, others argue that it would feed a global reflation narrative, simultaneously lifting riskier assets at the greenback’s expense.
Westpac strategists stated that the U.S. economy would outperform most thanks to faster vaccine deployment and fiscal stimulus. However, ongoing reflationary fiscal and monetary policy will likely leave DXY on a sustained medium-term bear trend.
Meanwhile, the euro lowered by less than 0.1% to $1.2122 on Friday, consolidating for a third day near that level. Thus far, the common currency is headed for a 0.6% weekly advance.
The dollar traded mostly flat at 104.795 Japanese yen, having plunged by 0.5% since the end of last week.
Bitcoin last exchanged hands weaker by 1.7% at $47,170 after hitting a record high of exactly $49,000.00. Despite that, the world’s most popular cryptocurrency remains on course for an almost 22% weekly advance.
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