Dollar hovers close to one-year excessive whereas Bitcoin hits $50,000

  • Safe-haven greenback supported by fairness sell-off
  • Australia greenback amongst greatest fallers
  • RBNZ meets Wednesday, markets anticipate rate of interest hike
  • <a href=””>Graphic: World FX charges</a>

LONDON, Oct 5 (Reuters) – The U.S. greenback edged again in direction of a one-year excessive versus main rivals on Tuesday forward of a key payrolls report on the finish of the week whereas cryptocurrency Bitcoin hit $50,000 for the primary time in 4 weeks.

The risk-sensitive Australian greenback was among the many greatest fallers, with the Reserve Bank of Australia reiterating that it doesn’t anticipate to boost rates of interest till 2024.

The U.S. greenback index , which measures the forex in opposition to six rivals, rose 0.13% to 93.932, shifting again in direction of Thursday’s peak of 94.504, its highest since late September 2020.

The index had rallied as a lot as 2.8% since Sept. 3 as merchants rushed to cost in tapering of financial stimulus this yr and attainable price rises for 2022.

The greenback has additionally benefited from safe-haven demand amid worries starting from the chance of worldwide stagflation to the U.S. debt ceiling standoff.

“The dollar started the week on the back foot yesterday, failing to rise on yet another equity sell-off, and suffering from the OPEC+ decision to stick to gradual (oil) supply hikes (400k barrels/day) which sent oil prices (and oil-sensitive currencies) higher,” ING strategists stated in a word.

“As highlighted in yesterday’s FX Daily, we think markets will keep buying the dips in the dollar, and this is what appears to have happened overnight, as the greenback rebounded across the board.”

Friday’s non-farm payrolls knowledge is predicted to indicate continued enchancment within the labour market, with a forecast for 488,000 jobs to have been added in September, a Reuters ballot confirmed.

Meanwhile, an index of Asia-Pacific equities (.MIAP00000PUS) fell by 0.74% after a 1.3% tumble in a single day for the S&P 500 (.SPX).

The Aussie dropped 0.1% to $0.7281, retreating farther from Monday’s four-day excessive of $0.73045.

The New Zealand greenback declined 0.34% to $0.6939, additionally backing away from a four-day peak at $0.6981. The Reserve Bank of New Zealand (RBNZ) decides coverage on Wednesday, with markets priced for 1 / 4 level improve to rates of interest.

“The RBA’s firm on‑hold stance is a weight on AUD,” Commonwealth Bank of Australia strategist Joseph Capurso wrote in a report.

For the RBNZ, “with markets already pricing a rate hike cycle, the likelihood of material NZD upside is low”, he stated.

The greenback gained 0.25% to 111.19 yen , whereas the euro weakened by 0.21% to $1.15965.

Sterling edged up 0.15% to $1.3629 and hit a three-week excessive in opposition to the euro at 85.11 pence.

While the consensus view is for additional positive aspects for the buck – with speculators pushing web lengthy bets to their highest since March 2020 – TD Securities warns that headroom could also be restricted.

“While the near-term USD bias leans higher, we’re wary about chasing the move at these levels,” Mark McCormick, TD’s international head of FX technique, wrote in a report.

There is plenty of dangerous international information priced into the U.S. greenback already and “the key for markets in the weeks ahead is to sort out the extent of the risk premium already priced in versus how these factors play out”, McCormick stated.

Cryptocurrencies rallied, in the meantime. Bitcoin, the world’s greatest cryptocurrency by market worth, hit $50,000 for the primary time since Sept. 7. learn extra

Reporting by Ritvik Carvalho
Additional reporting by Kevin Buckland in Tokyo
Editing by Raissa Kasolowsky and David Goodman

A U.S. dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration/File Photo