The Calm Before the Storm: Dollar Stability and Bitcoin’s Rise
Steady Dollar Amidst Uncertainty
Traders held their breath as they awaited Federal Reserve Chair Jerome Powell’s testimony, alongside key events like the European Central Bank rate decision and U.S. jobs data later in the week. The U.S. dollar remained mostly unchanged, with the services industry growth data showing a slight slowdown last month.
Bitcoin’s Resurgence in the Crypto Market
Bitcoin started gaining momentum once again, although it stayed below its recent record high following a volatile overnight session. The absence of significant catalysts kept the dollar in a tight range, with the upcoming February U.S. jobs report poised to test the rates outlook.
Focus on Fed Chair Powell’s Testimony
Traders eagerly awaited Powell’s testimony before Congress, expecting insights into the U.S. economy’s state. The market anticipates a reinforcement of the Fed’s stance to wait for more data before considering rate cuts, with a potential impact on market pricing for a June start to the FOMC’s rate cut cycle.
Market Expectations and Eurozone Dynamics
Market sentiment reflected about a 60% chance of a rate cut in June, according to the CME FedWatch tool. Meanwhile, the euro remained stable ahead of the ECB’s interest rate decision, with a focus on potential future rate cuts and economic projections updates.
Global Currency Movements
The British pound held steady before the British budget announcement, while the Australian dollar showed resilience despite GDP data indicating a minimal growth in the fourth quarter. In the cryptocurrency realm, Bitcoin’s surge and subsequent retreat kept markets on edge.
Market Speculation and Economic Indicators
Investors closely monitored Bitcoin’s movements, as it surged to a record high before retracing slightly. Its rally since October has been fueled by increased investments in U.S. spot exchange-traded crypto products and the anticipation of global interest rate declines.
