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FOREX-Dollar shackled by doubts over U.S. recovery; bitcoin tops $47,000 for first time

Published 09/02/2021, 11:40 am
Updated 09/02/2021, 11:42 am
© Reuters.
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* Dollar still nursing wounds from disappointing U.S. jobs figures

* Bitcoin soars most since 2017 after Tesla backs digital currency

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Kevin Buckland

TOKYO, Feb 9 (Reuters) - The dollar languished near its lowest in a week on Tuesday as investors began entertaining doubts about the scale of a recent rally driven by expectations of a faster pandemic recovery in the United States than elsewhere.

The spotlight remained on bitcoin BTC=BTSP as it reached a record above $47,000, building on a nearly 20% surge overnight that was the biggest since 2017, after Tesla Inc TSLA.O announced a $1.5 billion investment in the digital asset. dollar index against a basket of major currencies has vacillated around 91 since disappointing U.S. jobs data on Friday knocked the wind out of a two-week run that had lifted it to a more than two-month high of 91.6. It last traded at 90.935.

Investors had pushed up the greenback thanks to a faster U.S. vaccine rollout relative to most other countries, and as Democrats moved to fast-track President Joe Biden's $1.9 trillion COVID-19 relief package.

Many analysts, though, see that massive fiscal spending coupled with continued ultra-easy Federal Reserve monetary policy dragging down the dollar in the longer term.

"The bottom line is a large stimulus is highly likely to pass soon, exacerbating the widening in the U.S. current account deficit, and weighing on the USD," Commonwealth Bank of Australia currency analyst Joseph Capurso said in a client note.

Europe's "lagging" vaccination program will cap the euro near-term but the continent should catch up by the summer, after which the single currency could rally to $1.28 for the first time since 2014, he said.

The euro was little changed at $1.2055 in early Asian trading on Tuesday, up from the two-month low of $1.9520 touched Friday.

The dollar was mostly flat at 105.21 yen, after climbing to 105.765 at the end of last week for the first time since October.

Elsewhere, Tesla sent bitcoin surging by saying in its 2020 annual report on Monday that it had bought $1.5 billion of the world's most popular cryptocurrency as part of its broad investment policy, and that it expected to begin accepting the digital asset as payment for its products "in the near future."

"This is a turning point for how we view digital currencies," said Junichi Ishikawa, a foreign-exchange strategist at IG Securities in Tokyo.

"From here on, bitcoin will be genuinely considered as an asset available for selection by asset managers in their portfolios."

Bitcoin traded at $47,073 after pushing to a new record at$47,565.86 on Tuesday.

Rival coin ethereum changed hands at $1,746.50 after reaching an unprecedented $1,784.85 on Monday.

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Currency bid prices at 9:15AM (015 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.2054

$1.2050

+0.03%

-1.34%

+1.2055

+1.2049 Dollar/Yen

JPY=D3

105.1720

105.2100

+0.00%

+1.86%

+105.2470 +0.0000 Euro/Yen

EURJPY=

126.78

126.78

+0.00%

-0.11%

+126.8300 +126.7500 Dollar/Swiss

CHF=EBS

0.8985

0.8989

-0.03%

+1.57%

+0.8990

+0.8986 Sterling/Dollar GBP=D3

1.3744

1.3742

+0.04%

+0.62%

+1.3744

+1.3739 Dollar/Canadian CAD=D3

1.2736

1.2740

+0.00%

+0.05%

+1.2740

+1.2736 Aussie/Dollar

AUD=D3

0.7707

0.7704

+0.05%

+0.20%

+0.7708

+0.7701 NZ

NZD=D3

0.7226

0.7220

+0.12%

+0.67%

+0.7228

+0.7219 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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