(Updated at 15:35 Japan time)
Written by Hannah Lang, Harry Robertson
WASHINGTON/LONDON, Dec 4 (Reuters) – The dollar rose on Monday, regaining some momentum after falling for three weeks on expectations that the U.S. Federal Reserve would soon cut interest rates, while bitcoin rallied. It surpassed $42,000 for the first time since the beginning. 2022.
The dollar index against six major currencies rose 0.59% to 103.71, while the euro fell 0.61% to $1.0815.
Eugene Epstein, head of North American structured products at Moneycorp, said: “Many are realizing that the euro’s strength, largely due to historical US weakness, has potentially reached an inflection point.” ” he said. “The tone of the conversation seems to have shifted a little in that direction.”
In cryptocurrencies, Bitcoin soared to more than $42,100, its highest since April 2022, buoyed by expectations that U.S. regulators will soon approve a publicly traded Bitcoin fund. The final price was $41,424.
Matteo Greco said, “If approved, short-term capital inflows from traditional financial investors are expected, accelerating the upward trend, but if not approved, market participants have high expectations for approval, so the short-term “This could lead to negative price action.” Research analysts at fintech investment firm Finekia International said in a note.
Investor bets that the Fed’s rate hike cycle is over also pushed up risky assets in financial markets.
Chairman Jerome Powell said Friday that the Fed is prepared to tighten policy further if necessary, but also said interest rates are in a “pretty restrictive zone” and inflation is slowing.
The euro rose 3% against the dollar last month to more than $1.10, its highest since August, as data showed that U.S. inflation was cooling rapidly. The dollar index fell 3.1% in November, the biggest monthly decline in a year.
“November was a very bad month for the U.S. dollar, in part due to expectations of Fed policy easing,” said Colin Asher, senior economist at Mizuho Bank in London. “We think there is some room for a turnaround towards the end of the year.”
On Monday, the pound was down 0.65% at $1.262, while the Australian dollar was down 0.87% at $0.6615. The US dollar also strengthened against the Swiss franc, last up 0.48%.
The dollar last fell 0.19% against the yen to 147.085 yen, after falling to 146.24 yen per dollar in Asian markets, its lowest since mid-September.
Figures on Monday showed exports from Germany unexpectedly fell in October, dashing hopes that Europe’s largest economy was stabilizing.
A key data point this week for investors is the November U.S. jobs report, which is expected to show the U.S. economy added 180,000 jobs last month, up from 150,000 in October.
Eurozone retail sales figures will be released on Wednesday, ahead of China trade figures on Thursday.
(Reporting by Hannah Lang in Washington and Harry Robertson in London; Additional reporting by Brigid Riley in Tokyo; Editing by Bernadette Bohm, Gareth Jones and Alison Williams)
