USD Nears 150 Yen as Bitcoin Hits Fresh Peak
USD Strengthens Against Yen Ahead of US Inflation Data
The dollar approached the 150 yen mark on Tuesday and remained stable as investors awaited the release of U.S. inflation figures. Meanwhile, bitcoin surged to its highest level in over two years.
Subdued Trading in Asia
Trading activity was subdued in Asia due to the Lunar New Year holidays in China and Hong Kong. Traders were cautious ahead of the release of consumer prices data in the U.S., the world’s largest economy.
Yen Under Pressure
The greenback reached a two-month high against the yen, nearing the closely-watched 150 level. Analysts predicted that breaching this level would prompt Japanese officials to take measures to support the yen.
Factors Driving Dollar/Yen Pair
The weakening yen is attributed to investors scaling back their expectations of the Federal Reserve’s easing cycle. Additionally, signs that the Bank of Japan may not aggressively hike rates, even if it exits negative interest rates this year, have further pressured the yen.
US Economic Outperformance
Resilient economic data from the U.S., including a strong jobs report, has raised expectations of sustained higher U.S. rates. This has led to a decrease in market forecasts for rate cuts by the Fed this year.
USD and Other Currencies
The U.S. dollar saw a slight increase against a basket of currencies, while the Australian dollar experienced a slight decline. The euro and sterling also showed minor movements against the dollar.
Bitcoin’s Surge
Bitcoin reached its highest level since December 2021, surpassing $50,000 for a second consecutive day. The cryptocurrency has gained nearly 18% this year, buoyed by regulatory approval for U.S.-listed exchange traded funds (ETFs) and anticipation of its halving event.
Bitcoin’s Appeal
Analysts attributed bitcoin’s recent surge to factors such as the expectation of rate cuts, the upcoming halving event, and increased ETF inflows.
