Dollar steadies on U.S. recovery hopes, Bitcoin near record $52,640
- 18 February 2021
The dollar traded shy of recent highs on Thursday after its first back-to-back gains in two weeks as upbeat data bolstered expectations that the U.S. economy would recover from the coronavirus pandemic faster than that of most of its peers, APA reports citing Reuters.
Bitcoin traded close to the record high of $52,640 reached overnight, with its roughly 58% surge this month prompting some analysts to warn that the rally might be unsustainable.
Government stimulus cheques helped U.S. retail sales rebound in January, while industrial output and producer prices data also provided upside surprises.
Investors expect a further boost from President Joe Biden’s proposed $1.9 trillion COVID-19 relief package, with the president meeting top labour leaders on Wednesday to drum up support for the plan.
Meanwhile, minutes from the Federal Reserve’s policy meeting last month reinforced the central bank’s willingness to let the economy run hot while keeping monetary settings ultra-accommodative.
As we have seen over recent weeks, the dollar has become increasingly cyclical as there is now a link to the pricing of Fed and expected tapering and probably too, that with volatility indices generally low we also have more room to focus on smaller relative differences and cross-asset correlations have come down,” said Mikael Milhøj, senior analyst at Danske Bank.