During yesterday’s trading, the dollar exchange rate is falling moderately against major world currencies, market participants are looking forward to the publication of inflation data in the United States for May.
The calculated ICE index, which shows the dynamics of the dollar relative to six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), is declining by 0.1% during morning trading. The WSJ Dollar indicator, which tracks the dynamics of the dollar against 16 currencies, loses 0.19%.
As of today, the euro was worth $1.0640 compared to $1.0617 at the market close on Thursday.
Paired with the Japanese national currency, the dollar fell at the same time to 133.80 yen against 134.36 yen at the close of trading the day before.
The value of the British pound against the dollar increased by 0.18% today to $1.2515 from $1.2493.
Data on May inflation in the United States are the key statistics of this week, as they will allow both market participants and the Federal Reserve System (FRS) to better assess the state of the American economy.
According to the forecast of analysts surveyed by Trading Economics, the growth rate of consumer prices in the United States in May remained at the April level of 8.3%. At the same time, price growth excluding fuel and energy carriers is expected to slow down to 5.9% from 6.2% a month earlier.
The market also continues to evaluate the results of the meeting of the European Central Bank held on the eve. As expected, the ECB did not change all three key interest rates, but announced plans to raise them by 0.25 percentage points in July. Then the central bank plans to raise rates again in September, and the pace of this increase will depend on medium-term inflation forecasts.
The ECB also presented updated macroeconomic forecasts. Now the regulator expects that the growth rate of consumer prices in the region in 2022 will be 6.8%, in 2023 – 3.5%, in 2024 – 2.1%.
The forecast of eurozone GDP growth for 2022 was lowered to 2.8% from 3.7% expected in March, for 2023 – to 2.1% from 2.8%, for 2024 – raised to 2.1% from 1.6%.
Dollar vs BTC
Since May, the US dollar has fallen by 9% against six major currencies. This trend will continue, experts are sure. They told how this will affect BTC, and named assets that are worth investing in to save capital.
The dollar has fallen to its lowest level since April 2018. The value of the DXY index, which shows the strength of the dollar against a basket of six currencies (euro, pound, yen, Canadian dollar, Swedish krona and Swiss franc), dropped to 91.4 points, at the moment falling to 91.2 points. The decline began in May, when the index value exceeded 100 points.
As the dollar weakened, bitcoin became more expensive. Since May, its price has increased by 215%, to the current $19.1 thousand on November 30, it rose to almost $19.9 thousand and updated the historical maximum. The presence of a correlation between the dollar and bitcoin was noticed by analysts Omkar Godboul and Michael van de Poppe. The latter suggested that BTC will be able to overcome the level of $ 100 thousand if the US currency continues to fall in price.
The US Federal Reserve System (FRS) is pouring serious funds into it to restore the country’s economy, which leads to an increase in inflation and depreciation of the dollar. In the future, we can expect a further decline in the dollar, the expert warned. He believes that this may cause an increase in interest in investing in cryptocurrencies.
“This year, the crisis situation, the danger of depreciation of most assets led to the fact that large companies and investment funds began to buy bitcoin in large volumes. The coin has become a kind of equivalent to gold as the main protective asset. Therefore, for sure, as the problems in the global and American economies increase, the popularity of bitcoin will increase”