Dollar gains as U.S. economic picture brightens, bitcoin touches new record
The dollar rose on Wednesday as upbeat economic data and signs of strengthening inflation helped the greenback gain ground against a basket of world currencies. Bitcoin touched a record high of $52,338.85, a day after clearing the $50,000 hurdle for the first time, prompting some analysts to warn that current levels might be unsustainable amid the cryptocurrency’s heightened volatility.
U.S. retail sales, industrial output and producer prices data provided robust surprises to the upside, signaling the economic recovery from the pandemic recession is gaining momentum as vaccine deployment progresses.
Despite optimistic economic reports, U.S. bond yields reversed their recent advance on waning selling pressure. The 10-year yield had last pared back to 1.2939% after rising as high as 1.333% earlier in the day.
The dollar index, a measure of the currency’s strength against six other major currencies, continued to recover from Friday’s three-week low, and was last 0.25% higher at 90.933.
“This price action really began yesterday, and today we’re seeing follow-through,” Chandler added. “There’s still a lot of people who are still bearish on the dollar but this upside direction has a bit more movement.”
The yen, which is sensitive to U.S. yields, jumped to as high as 106.21 per dollar in Asian trade, its highest since September, before retreating to 105.88.
The euro slipped 0.6% to $1.20. The positive mood on the economic outlook is underpinning risk-sensitive currencies. The British pound fell 0.3% to $1.39, having reached its highest level since April 2018 on Tuesday. The Australian dollar fell 0.05% to $0.78.
Reference: CNBC
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