Bitcoin still touched all-time High, Dollar gains - U.S. yield fall
Dollar gains in tug-of-war between vaccine, rising virus cases
The dollar on Friday rose against major currencies such as the euro and yen, with traders consolidating positions amid competing forces that pull the currency in different directions: the surge in virus cases, on the one hand, and positive vaccine news, on the other.
The possible resumption of U.S. stimulus talks for COVID-19 relief has also weighed on the dollar as a safe haven. Republican and Democratic senators agreed on Thursday to revive those discussions.
Overall, the greenback ended the week on a loss against a currency basket. The week started off on a negative note for the dollar with positive news on a vaccine for COVID-19, but the market has since moved back and forth between focusing on coronavirus cases and the virus drug.
Pfizer Inc said it had applied for emergency use authorization in the United States for its COVID-19 vaccine.
The dollar briefly rose overnight after the Mnuchin news late Thursday.
In afternoon trading, the dollar was flat against a currency basket at 92.369 in a quiet day for currency markets.
The euro was down 0.1% against the dollar at $1.1859, posting a small weekly gain.
Action Economics noted some pre-weekend selling in the euro going into the London close.
“The lack of progress between the European Union and the U.K. on Brexit trade talks has likely kept a cap on the euro despite generally waning U.S. dollar sentiment,” it said in its daily blog.
The Australian dollar - seen as a liquid proxy for risk appetite - posted its best monthly gain versus the U.S. dollar since April. It last traded up 0.4% at US$0.7308.
The U.S. dollar was up 0.1% versus the yen at 103.81 yen.
Bond yields fall slightly amid Fed and Treasury disagreement over emergency funding
U.S. Treasury yields dipped on Friday after U.S. Treasury Secretary Steven Mnuchin decided to let several of the Federal Reserve’s emergency funding programs expire on Dec. 31.
The yield on the benchmark 10-year Treasury note slipped slightly to 0.84%, while the yield on the 30-year Treasury bond fell to 1.547%. Yields move inversely to prices.
Treasury yields slipped after Mnuchin issued a letter on Thursday that said he would not extend the Fed’s programs that used Congress’ CARES Act funds. This reduces the Fed’s ability to support the financial system.
The Fed pushed back on Mnuchin’s decision, saying: “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
Bitcoin rose to a three-year high of $18,824 on Friday, getting close to its all-time high of just under $20,000. It was last up 4.6% at $18,646.15.
Bitcoin is now being seen as a ‘true safe-haven asset’: BC Group
What differentiates Bitcoin’s recent rally from the past is its sustained upward momentum through several key thresholds, says Dave Chapman, executive director of BC Group.
Bitcoin can rise to as high as $60,000 next year as it continues to replace gold, Novogratz says
Bitcoin jumped to its highest level in nearly three years on Wednesday, and Galaxy Digital CEO Michael Novogratz believes the comeback rally is just getting started.
Novogratz, a known cryptocurrency bull, sees bitcoin rising as high as $55,000 or $60,000 by the end of next year as it increasingly displaces gold in investors’ portfolios.
Reference: CNBC
Thai
Eng