Dollar plummets to 2-1/2-year low on stimulus hopes as bitcoin hits all-time high

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Dollar plummets to 2-1/2-year low on stimulus hopes as bitcoin hits all-time high

On Tuesday, the American Dollar Index (DXY) measured against a basket of six major currencies on an average had plunged to a nearly two and a half year low, as investors’ appetite for riskier assets had stepped up following prospects of further fiscal stimulus in a near-term outlook alongside anticipations of a rapid economic recovery with potential pandemic vaccine candidates such as Moderna and Pfizer filing for an authorization of mass-usage of their vaccines.

On top of that, in the latest flashpoint of a sharply softening American Dollar alongside likelihoods of a mass adoption of digital assets, the original cryptocurrency, Bitcoin had reached its all-time high of $19,115.14 earlier in the day.

US Dollar sinks on proposed pandemic stimulus bill

In point of fact, Tuesday’s tottering of the greenback against all major currencies alongside almost all of the emerging market currencies, was largely galvanized by a newly proposed pandemic relief bill in which bipartisan lawmakers in the Capitol Hill had proposed a $908 billion relief fund including an additional $228 billion in pay-check protection funds for small businesses such as hotels and restaurants, while the relief funds would continue at least until March 31.

Citing statistics, in the day’s FX market wind down, the US Dollar Index (DXY) tottered as much as 0.7 per cent to 91.31 after hitting a session low of 91.26, its lowest level since the April of 2018, while the bloc’s single currency euro surged 1 per cent against its American counterpart to a 2-1/2-year peak of $1.2055.

Besides, as Brexit-talk tunnels had reopened over the recent past, the British currency gained 0.7 per cent to $1.3410, while the New Zealand Dollar added 0.7 per cent to $0.7055, hitting its highest level since June 2018.

Meanwhile, citing a rapidly surging investors’ bet on riskier assets alongside a near-zero interest rate at least until September 2023, which in turn had been tanking the American currency over the recent past, a vice president of dealing and trading at Tempus Inc.

in Washington, John Doyle said, “Traders are looking for any reason to bid risk up and that comes at the cost of the dollar”.