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Dollar climbs to 13-month peak, bitcoin eyes $100,000
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Dollar climbs to 13-month peak, bitcoin eyes $100,000
Nov 21, 2024 10:57 PM

TOKYO (Reuters) -The U.S. dollar edged up to a fresh 13-month high on Friday, with little to stop the greenback's momentum as investors assessed the outlook for the Federal Reserve's interest rate path, while bitcoin hit a record high and neared the $100,000 level.

The dollar index edged up 0.08% to 107.15 after touching its highest level since Oct. 4, 2023 at 107.18, with little data this week to dent its strength.

"It's just trying now to find what the catalysts are ... (and) it's obviously going to be does the Fed cut or not again" in December, said Tony Sycamore, market analyst at IG.

Expectations of a move next month have been volatile. Markets now see a 57.8% chance of a 25-basis-point cut, down from 72.2% a week ago, according to CME's FedWatch Tool.

U.S. PCE for October scheduled for release next Friday will be a key focus.

Global PMIs are due later in the day, although those figures probably won't "change the dial too much," IG's Sycamore said.

Bitcoin briefly rose to a record $99,388 before paring gains.

The cryptocurrency has surged more than 40% since the U.S. election on expectations U.S. President-elect Donald Trump will loosen the regulatory environment for cryptocurrencies. It was last up about 1% at $99,028.

The dollar, meanwhile, has appreciated around 3% so far this month on expectations that Trump's policies could reignite inflation and limit the Fed's ability to cut rates, keeping other currencies under pressure.

Trump floated the idea of appointing Kevin Warsh as Treasury Secretary on the understanding that he could later be Federal Reserve Chairman, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

Sterling traded at $1.25705, last down 0.14% on the day. It earlier touched its weakest against the dollar since May 14 at $1.25655.

The euro, which makes up a hefty portion of the dollar index, slid 0.05% to $1.0469 after falling to a 13-month low of $1.0461 the previous day.

The euro has been one of the main casualties of the dollar's post-election ascent. Recent escalations between Russia and Ukraine and political uncertainty as Germany, the bloc's biggest economy, have further weighed.

YEN KEEPS SPOTLIGHT ON BOJ

The Japanese yen has fallen a little over 7% against the greenback since October, sliding back below 156 per dollar last week for the first time since July and sparking the possibility Japanese authorities may again take steps to shore up the currency.

In a boost to the currency, BOJ Governor Kazuo Ueda on Thursday said that the bank will "seriously" take into account the impact yen moves could have on the economic and price outlook.

Meanwhile, Japan's core inflation in October came in 2.3% higher from a year earlier, data showed on Friday, keeping pressure on the central bank to raise its still-low interest rates.

But the currency's gains were short-lived, with the dollar last up 0.2% at 154.84 yen.

Just over half of economists in a Reuters poll believed the BOJ will hike in December, prompted in part by concerns about the depreciating yen.

"The renewed strengthening of underlying inflation coupled with the recent rebound in consumer spending and the renewed weakening of the yen strengthen the case for another BOJ rate hike next month," Marcel Thieliant, head of Asia-Pacific at Capital Economics, wrote in a research note.

Elsewhere, the New Zealand dollar hit a one-year low of $0.58265 on growing expectations that the country's central bank could pull the trigger on a super-sized rate cut of 75 basis points (bps) next week.

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