The US dollar moved within a narrow range today, Monday, under pressure from declining Treasury yields, as investors await more significant economic data for new indicators regarding the timing of interest rate cuts by the Federal Reserve. Bitcoin rose to its highest level in over two years amid substantial flows into exchange-traded cryptocurrency funds. The euro performed strongly, increasing by 0.33% on Friday, as a monetary policy decision from the European Central Bank looms on Thursday. The yen fluctuated around 150 against the dollar, a level closely watched by traders, as investors assess whether the Bank of Japan may end its negative interest rate policy soon this month.
The dollar index, which measures the performance of the US currency against six major currencies including the euro and yen, showed little change, trading at 103.85 by 0530 GMT. The index had lost 0.26% on Friday following weak data regarding spending in the manufacturing and construction sectors. This also affected Treasury yields, diminishing additional support for the dollar as the yield on 10-year bonds dropped to a low of 4.178% for the first time in two weeks, reaching around 4.2% today, Monday.
Manufacturing and services PMI readings are due tomorrow, Tuesday, while monthly employment data will be released on Friday. Late last week, it was indicated that it is premature to conclude that the inflation target set by the central bank is close to being achieved. Markets are speculating whether the Bank of Japan will end its negative interest rate policy at its meetings on March 18 and 19 or wait until April or later.
On another note, the euro showed little change and remained at $1.08435, stabilizing near its recent peak. Most economists expect the European Central Bank to lower interest rates first in its June meeting, but they hope to gain additional timing indicators from the press conference of ECB President Christine Lagarde. The British pound rose 0.08% to $1.2663.
Bitcoin, in the latest trades, increased by approximately 1.2% from Sunday, reaching $63,350 after earlier hitting $64,284.75, marking its strongest performance since November 2021, the same month it recorded its all-time high of $68,999.99. The largest cryptocurrency by market capitalization has surged by 50% this year, with most of the increase occurring in recent weeks amid a rise in trading volume for Bitcoin funds listed in the United States after their approval earlier this year.
