Dollar begins 2024 with a rise, and Bitcoin exceeds $45,000

On the first trading day of the new year, the dollar saw an increase in value as investors turned their attention to upcoming economic data that could provide insights into the Federal Reserve’s future moves. Bitcoin also experienced a rise, exceeding $45,000 for the first time since April 2022.

In 2023, the dollar index, measuring the US currency against six other currencies, witnessed a decline after two consecutive years of gains. In the latest trading, the index recorded 101.44, a 0.059 percent increase, with investors evaluating the possibility of the Federal Reserve reducing interest rates this year.

The Japanese yen bore the brunt of the dollar’s rise, declining by 0.35 percent to 141.36 yen to the dollar. The yen had experienced a seven percent fall in 2023. Market expectations currently suggest an 86 percent probability of the US Federal Reserve cutting interest rates starting in March, with an anticipated decline of over 150 basis points throughout the year, according to the CME Fed Watch tool.

Focus is now directed towards several economic data releases scheduled for this week, including job vacancies and non-farm payrolls data. Additionally, the minutes from the Federal Reserve’s December meeting, expected on Thursday, will provide insights into central bank officials’ perspectives on potential interest rate cuts in the coming year.

The euro saw a 0.13 percent decrease to $1.103, moving away from its five-month high at $1.11395 touched last week. Despite this decline, the single European currency recorded a three percent increase last year, its first annual rise since 2020.

The pound sterling, on the other hand, increased to $1.2729, rising by 0.05 percent on Tuesday. In 2023, it posted its strongest performance since 2017, with a five percent increase. However, economic challenges and election-related uncertainty make a repeat performance unlikely.

The Australian dollar rose by 0.35 percent to $0.68335, while the New Zealand dollar settled at $0.63155.

In the cryptocurrency market, Bitcoin started the year with a strong surge, touching its highest level in 21 months at $45,532. This was attributed to growing expectations that the US Securities and Exchange Commission will soon approve the listing of Bitcoin spot trading funds.