- Dollar Index Hits 9.5-Month High
- Powell’s Chances Of A Second Term As President Increase With Yellen’s Support
- Bitcoin is Back After 3 Months
Dollar Index Hits 9.5-Month High
The understanding that the Covid-19 pandemic could adversely affect the economies with new variants such as Delta and the concern that it could delay global economic growth for a while started to lose the risk appetite of international investors again. Especially with the search for safe assets of forex investors, the dollar broke its record of 9.5 months against other currencies. It was renewed once again with a level of 93.59.
The dollar index, which tracks the dollar against the other six major currencies, gained nearly 1 % last week, making its biggest weekly rally in the previous two months. After stabilizing its position above 93 on Thursday with Delta concerns, the index continued to move up to the level of 93.68 as of 14:30 today.
ING currency analysts said in a client note that the index is pushing new highs due to the dollar’s weight in trade. “Demand for the dollar will increase further with worried exits.”
According to ING analysts, although the Fed is rapidly approaching tapering, the demand for the dollar will increase even more in the coming days, especially with the exit of investors, whose concerns about growth stories outside the U.S. have increased.
The safe-haven U.S. Dollar slipped from a 9.5 month high on Friday, as risk appetite improved with equities gaining and benchmark Treasury yields higher, although the near-term outlook for the greenback remained upbeat.
The direction of the September U.S. Dollar Index on Monday is likely to be determined by trader reaction to 93.455 and 93.510.
Powell’s Chances Of A Second Term As President Increase With Yellen’s Support
Fed Chair Jerome Powell, with the support of U.S. Treasury Secretary Janet Yellen, is likely to become a second-term President.
The prospect of Jerome Powell becoming Fed Chairman for the second time is increasing with the support of Treasury Secretary Janet Yellen. The increase in this probability also reduces the possibility of uncertainty in monetary policy in an environment of inflation and Delta variant risks.
According to sources familiar with the matter, Yellen told Counselors at the White House that she favored the reelection of Powell, whose term expires in February.
It is stated that U.S. President Joe Biden can announce his decision on the issue until September 6.
Sources also state that the government supports Fed Executive Lael Brainard’s candidacy for President.
Derek Tang, Monetary Policy Analytics Economist, said: “The biggest benefit of Powell being President again is continuity. It is reassuring to ensure this continuity in times of such high uncertainty.”
Yellen’s support for Powell came at a critical time. President Powell is expected to signal at this week’s Jackson Hole meetings on when and how to withdraw the tremendous support for the economy.
Bitcoin is Back After 3 Months
After falling to 30 thousand dollars in July, Bitcoin rose by close to 70% and saw over 50 thousand dollars again three months later.
While Bitcoin saw 50 thousand dollars again after a three-month break, the rise in Ethereum and Cardano’s ADA continued.
Bitcoin’s rise in the past month also resurfaced the $100,000 estimators. While Mike McGlone of Bloomberg Intelligence pointed out that there is still room to reach the peak level achieved this year, Fundstrat Global Advisors Co-Founder Tom Lee predicted that $100,000 could be seen in Bitcoin by the end of 2021. “We think that if Bitcoin breaks its 200-day average, it will enter a strong rally,” Lee said in a note.
Bensignor Investment Strategies CEO Rick Bensignor said that the lower limit of Bitcoin’s new transaction range has increased from 40 thousand to 50 thousand.
The rise of Bitcoin in 2021 was shaped around Elon Musk’s support for crypto money and Twitter shares. Bitcoin’s rise began in December when Musk asked on Twitter if it was possible to move Tesla’s balance sheet to Bitcoin.
After Tesla included Bitcoin in its balance sheet, the crypto money, which climbed to 58 thousand dollars with a rapid rise until the end of February, was withdrawn to 45 thousand dollars at the beginning of March.
Bitcoin, which rose again with the news flow that followed, reached an all-time high by seeing $64,869 on the day of Coinbase’s public offering.