The dollar was largely stable on Wednesday, as traders avoided big bets ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress, as well as the European Central Bank’s decision on interest rates and US jobs data this week.
In terms of cryptocurrencies, Bitcoin gained new momentum, although it remained below the record high level it reached during a volatile evening session.
The absence of stimuli kept the dollar trapped within a narrow range after it fell last night against the backdrop of data that showed the growth of the US services sector slowing slightly last month.
Fundamental factors
The US jobs report for last February – which will be released next Friday – is considered a test of interest rate expectations, with the possibility of shaking the markets if employment surprises them and comes in an upward direction.
Traders are also awaiting the first day of the Federal Reserve Chairman’s testimony before Congress about the state of the economy, which is expected to support the US Central Bank’s position in terms of waiting for more data before making any cuts in interest rates.
The dollar index – which measures the performance of the US currency against a basket of 6 currencies – hovered around the level of 103.76 points.
The euro stabilized at $1.0855 as traders awaited the European Central Bank’s decision on the interest rate tomorrow, Thursday.
The European Central Bank is expected to leave interest rates at a record level of 4%.
The performance of the dollar against other currencies
- The British pound stabilized at $1.27050 ahead of the British budget announcement on Wednesday.
- The Australian dollar rebounded in afternoon trade in Asia, shrugging off GDP data that showed the economy grew just 0.2% in the fourth quarter, supporting lower interest rates. The currency rose in recent transactions by 0.24% to $0.65195.
- The New Zealand dollar rose 0.16% to $0.60960, after touching a three-week low of $0.6070 earlier in the session.
- The dollar fell 0.12% against the yen to record 149.86 after falling overnight to 149.70.
What about Bitcoin?
Markets are also closely watching Bitcoin, the world’s largest cryptocurrency, after it rose to a record high overnight before falling sharply.
Bitcoin rose in the latest transactions by 4.11% to $65,921. The cryptocurrency has risen strongly since last October, as investors pumped their money into its exchange-traded funds in the United States in light of the possibility of lowering global interest rates.
