US Dollar pulls off three-week lows as Bitcoin briefly tops $50,000 for first time

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US Dollar pulls off three-week lows as Bitcoin briefly tops $50,000 for first time

On Tuesday, the American currency claws back from a three-week low as US Treasury Yields had spiked to their pre-pandemic highs, while bitcoin, the original cryptocurrency, had briefly topped a $50,000-treadle, but eased off from its session highs on late-afternoon session.

In point of fact, in the day’s gains in the greenback were almost entirely prompted by a gradual evaporation of a holograph of the pandemic’s fiscal holocaust, while a bullish market sentiment had also buoyed up appetite for riskier assets, tottering safe-haven gold futures as much as 1.7 per cent.

Besides, a revival of US Dollar’s safe-haven bid on Tuesday was largely assisted by a remark from the St. Louis Federal Reserve President James Bullard, who was quoted saying earlier in the US trading hours in an interview with CNBC that the United States’ financial conditions were “generally good” and inflation would likely to hoist up later this year, eventually driving a safe-haven demand of the American currency.

Apart from that, as more and more institutional investors and traders were contemplating Bitcoin as a rare window of opportunity to coffer up quick gains, the digital asset topped a $50,000 level for the first time earlier in the day, though there had been sharp rebuff from a raft of analysts who had expressed an utter caution over opening up of further “buying” positions for the digital coin.

US Dollar claws back from three-week low, Bitcoin tops $50,000 for first time

Citing statistics, in the day’s FX market round off, the US Dollar Index (DXY) measured against a basket of six major currencies on an average rose 0.21 per cent to 90.50 after dwindling to a session-low of 90.11, its lowest level since late-January, while Bitcoin, the world’s largest digital asset, wrapped up the day at $48,675.18 after breaching a critical $50,000-lever for the first time on record.

Apart from that, safe-haven Japanese yen faltered 0.58 per cent against its American peer to 105.88 yen per Dollar, while Swiss Franc shed 0.21 per cent to $0.8920 against the greenback and the bloc’s common currency euro, shared by 19 eurozone member countries, fell 0.10 per cent to $1.2113.

Meanwhile, citing that the latest leg of US Dollar rally would more likely to be shortlived, a Chief FX strategist at Scotiabank in Toronto, Shaun Osborne said, “High yields are providing the dollar with a little bit of support.

But, a lot of folks believe rising yields are going to be accompanied with higher inflation. I'm not sure today's action is telling us a lot about the overall trend. I think the dollar is likely to trade more softly going forward”.