1, March, 2024
HomeBusinessDollar Slips as US Rates Plateau Amid Economic Signals; Cryptocurrency Market Surges

Dollar Slips as US Rates Plateau Amid Economic Signals; Cryptocurrency Market Surges

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The dollar faced a decline against a basket of currencies on November 25, reacting to steady US business activity but a decline in private sector employment, aligning with expectations of a fourth-quarter economic slowdown. With US markets closing early after the Thanksgiving holiday, currency trading remained within a narrow range.

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Analyst Michael Brown from Trader X in London commented on the subdued market activity, stating, “It’s incredibly quiet, as you’d expect on the day after Thanksgiving, with liquidity still pretty thin, and volumes again on the light side.”

S&P Global reported an unchanged flash US Composite PMI Output Index of 50.7 for November, with a rise in services sector activity compensating for a contraction in manufacturing. However, the lack of robust order growth led to a decline in employment, impacting the survey’s employment index.

The dollar index, measuring the US currency against six peers, eased 0.4% to 103.35, hovering close to a 2-1/2 month low. This week, the index saw a 0.5% decline, following a 1.9% slip last week, marking its weakest monthly performance in a year.

The Japanese yen remained relatively stable against the dollar, standing at 149.45, with news of Japan’s core consumer price growth showing a slight pickup in October, potentially influencing the Bank of Japan (BOJ) to consider monetary policy adjustments.

ING economists anticipate the BOJ moving away from its super-accommodative stance in the first quarter of the next year, potentially scrapping the yield curve program and initiating its first rate hike in Q2 2024 if wage growth accelerates.

Meanwhile, the euro recorded a 0.39% gain at $1.0946, supported by data confirming Germany’s slight economic contraction in Q3 and improved business morale in November.

Sterling rose by 0.57% to its highest level since early September after data indicated British companies returned to growth in November, instilling optimism about the UK avoiding a recession.

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In the cryptocurrency realm, Bitcoin surged by 1.14% to $37,728, reaching its highest level since May 2022. The market revival is attributed to a series of filings for spot bitcoin and ether exchange-traded funds (ETFs), signaling renewed interest from traditional finance heavyweights and marking a significant turnaround from the challenges faced by the crypto market last year.

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