The dollar regained ground this Monday, regaining some ground after falling for three consecutive weeks on bets that the Federal Reserve will soon cut interest rates, while bitcoin surpassed $42,000 for the first time since early 2022.
The dollar index, which compares the greenback to a basket of six prominent currencies, gained 0.54%, to 103.67 units, while the euro fell 0.49%, to 1.0828 dollars.
“We are witnessing a rebound and a reconfiguration of expectations compared to what we expected for the end of the year,” said Helen Given, Foreign Exchange Trader at Monex USA.
President Jerome Powell said this Friday that The Fed was prepared to tighten monetary policy further if necessary, but also assured that rates are “well within restrictive territory” and slowing inflation.
“Yes, he said interest rate hikes are over, but that was more or less cooked as far as the Fed was concerned,” Given said. “The most important side of the coin we saw was that he laid down a law and said the cuts are not coming anytime soon.”
Bitcoin hit its highest since April 2022
In cryptocurrencies, the Bitcoin reached its highest since April 2022, at more than $42,100, boosted by expectations that U.S. regulators will soon approve an exchange-traded fund. Its last price was $41,912.
Investor bets that the Fed’s rate-hiking cycle has come to an end have also boosted riskier assets in financial markets.
The key data for investors this week is the November US jobs report, which is expected to show the US economy added 180,000 jobs last month, up from 150,000 in October.
Last month, The euro rose 3% against the dollar and reached its highest level since August, above $1.10, after data showed that US inflation was cooling rapidly. The dollar index lost 3.1% in November, its biggest monthly drop in a year.