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The upward momentum of the US dollar encountered resistance on Tuesday as traders maintained their expectations of multiple interest rate cuts by the Federal Reserve this year, citing signs of slowing US inflation. Meanwhile, in the cryptocurrency sphere, Bitcoin continued to hover near its highest level since April 2022, driven by anticipation of imminent approvals for spot Bitcoin trading funds.
The euro found stability in recent transactions at $1.0949, rebounding from its three-week low of $1.0877. Simultaneously, the yen moved away from the 145 level against the dollar following a sharp decline in the US currency, influenced by the decrease in US Treasury bond yields.
Market dynamics were influenced by the Federal Reserve Bank of New York’s latest survey of consumer expectations, revealing that short-term inflation expectations among US consumers hit their lowest level in almost three years in December. A key reading on US inflation later in the week is expected to provide insights into the Federal Reserve’s room for interest rate cuts in the coming months.
The dollar saw a marginal decline of 0.04 percent, settling at 102.26 against a basket of currencies after a 1 percent rise the previous week. The British pound stabilized at $1.27395.
In the latest trading, the Australian dollar recorded $0.6708, moving away from its three-week low of $0.6641 on Friday. The New Zealand dollar, while falling 0.19 percent to $0.6241, remained distant from its recent three-week low of $0.6182.
Data on Tuesday indicated a slowdown in core inflation in Tokyo for the second consecutive month in December, alleviating some pressure on the Bank of Japan to hastily shift away from monetary policy easing. The yen experienced little change after the release of the data, rising by 0.3 percent to 143.81 against the dollar.
Bitcoin settled in recent transactions at $46,771, maintaining its position after reaching a 21-month high at $47,281 in the previous session. Investment managers revealed fees for proposed Bitcoin trading funds on Monday, marking another step towards obtaining approval from the US securities regulator this week.
Ether, the second-largest cryptocurrency, settled at $2,310, contributing to the overall resilience and dynamism observed in the cryptocurrency market.
