Written by Brigid Riley
TOKYO (Reuters) – The U.S. dollar rose to a 13-month high on Friday, doing little to stem the greenback’s momentum as investors weighed the outlook for the Federal Reserve’s interest rate hike, while bitcoin hit a record high and neared $100,000. level.
It rose 0.08% to 107.15 after touching its highest level since Oct. 4, 2023 at 107.18, with little data this week to bend its strength.
“It’s just trying now to figure out what the motivations are … (and) it’s clear what it will be whether or not the Fed will cut again” in December, said Tony Sycamore, market analyst at IG.
The expectation that action will be taken next month is intense. Markets now see a 57.8% chance of a 25-point cut, down from 72.2% last week, according to CME’s FedWatch Tool.
US PCE for October scheduled for release next Friday will be in focus.
Global PMIs will be needed over time, though those figures probably won’t “change the dial too much,” IG’s Sycamore said.
it briefly rose to a record $99,388 before including gains.
The cryptocurrency has grown more than 40% since the US election on the expectation that US President-elect Donald Trump will loosen the regulatory environment for cryptocurrencies. It ended up about 1% at $99,028.
The dollar, on the other hand, has appreciated about 3% so far this month on expectations that Trump’s policies may control inflation and reduce the Fed’s ability to cut rates, keeping other currencies under pressure.
Trump took the idea of ​​appointing Kevin Warsh as Secretary of the Treasury with the understanding that he could later become the Chairman of the Federal Reserve, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Sterling traded at $1.25705, down 0.14% on the day. It earlier touched its weakness against the dollar since May 14 at $1.25655.
The euro, which forms a major component of the dollar index, fell 0.05% to $1.0469 after falling to a 13-month low of $1.0461 the previous day.
The euro has been one of the biggest casualties of the dollar’s post-election surge. Recent tensions between Russia and Ukraine and political uncertainty as Germany, the bloc’s largest economy, have continued to weigh.
YEN KEEPING STRONG AT BOJ
The Japanese yen () has fallen more than 7% against the greenback since October, falling back below 156 to the dollar last week for the first time since July and raising the possibility that the Japanese authorities may take further steps to boost the currency.
On raising funds, BOJ Governor Kazuo Ueda said Thursday that the bank will “seriously consider” the yen’s potential impact on the economic outlook and prices.
Meanwhile, core inflation in Japan in October rose 2.3% from a year earlier, data showed on Friday, keeping pressure on the central bank to raise its still-low interest rates.
But the currency’s gains were short-lived, with the dollar ending up 0.2% at 154.84 yen.
Just over half of economists in a Reuters poll believe the BOJ will hike in December, fueled by concerns about a weaker yen.
“Resurgent inflation coupled with recent increases in consumer spending and a renewed weakening of the yen strengthens the case for a BOJ rate hike next month,” Marcel Thieliant, head of Asia-Pacific at Capital Economics, wrote in a study. a note.
Elsewhere, the New Zealand dollar fell to a one-year low of $0.58265 on growing expectations that the country’s central bank may lead a massive rate cut of 75 basis points (bps) next week.
