Bitcoin hits near 3-year peak – Dollar drops
Dollar dips as weak trend seen intact; offshore Chinese yuan rises
The dollar fell to a one-week low on Tuesday in quiet trading, still weighed down by optimism over a second coronavirus vaccine, as the outlook for the currency remained downbeat with the Federal Reserve and U.S. Congress poised to do more to ease COVID-19’s economic damage.
The euro, sterling, Swiss franc, and yen rose against the dollar, while the Chinese yuan hit its highest against the U.S. currency since June 2018.
In afternoon trading, the dollar index =USD fell to a one-week low against a basket of major currencies, and last stood at 92.426, down 0.1%.
Against the yen, the dollar fell 0.4% to 104.20 JPY=EBS, while the euro inched higher by 0.1% to $1.1862 EUR=EBS.
The euro, however, fell against a broadly stronger pound, which gained on media reports that Britain could reach a post-Brexit trade agreement with the European Union by early next week.
The offshore yuan CNH=EBS, meanwhile, hit its highest since June 2018 against the dollar at 6.5457, as positive economic data continued to support the Chinese currency.
Bitcoin hits nearly three-year peak, homes in on record
Bitcoin on Tuesday soared to its highest level since December 2017 as the asset’s perceived quality as a hedge against inflation and expectations of mainstream acceptance lured institutional and retail demand.
The largest cryptocurrency BTC=BTSP in terms of market capitalization climbed to $17,868, its highest level since Dec. 20, 2017, and was last up 6.1% at $17,760. It hit just shy of $20,000 in mid-December, 2017, during a buying frenzy driven by retail investors.
Bitcoin has climbed roughly 150% this year and rallied about 360% from its March lows.
“Driven by a mix of market structure and strong fundamentals, bitcoin could now be within days of reaching its all-time high,” Nicholas Pelecanos, head of trading at NEM, said.
“Underlying this bullish price action is the inflation hedge narrative that has captured Wall Street since the immense money printing campaigns undertaken by the Fed earlier this year,” he added.
Citi’s technical analyst Tom Fitzpatrick said in a note that bitcoin could climb as high $318,000, based on his charts.
Reference: Reuters, CNBC
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