Forex Today: FX action remains choppy ahead of mid-tier US data, Bitcoin hits record high above $100K
Here is what you need to know on Thursday, December 5:
The US Dollar (USD) Index continues to stretch lower toward 106.00 early Thursday after posting small losses for the second consecutive day on Wednesday. The US economic calendar will feature weekly Initial Jobless Claims and Goods Trade Balance data for October. During the European trading hours, Eurostat will publish Retail Sales figures for October.
While participating in a moderated discussion at the New York Times DealBook Summit, in New York on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell reiterated that the US economy is in a "remarkably good shape." He further explained that they are trying to be in a middle place where the policy is less restrictive, so inflation can fall but not damage the labor market. These comments failed to trigger a noticeable market reaction. Nevertheless, Wall Street's main indexes registered strong daily gains and the benchmark 10-year US Treasury bond yield retreated below 4.2%, making it difficult for the USD Index to gain traction. Early Thursday, US stock index futures trade virtually unchanged.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.40% | 0.10% | 0.09% | 0.57% | 1.10% | 0.82% | 0.31% | |
| EUR | -0.40% | -0.34% | -0.28% | 0.19% | 0.80% | 0.42% | -0.04% | |
| GBP | -0.10% | 0.34% | 0.02% | 0.52% | 1.14% | 0.78% | 0.27% | |
| JPY | -0.09% | 0.28% | -0.02% | 0.46% | 1.04% | 0.75% | 0.18% | |
| CAD | -0.57% | -0.19% | -0.52% | -0.46% | 0.69% | 0.25% | -0.25% | |
| AUD | -1.10% | -0.80% | -1.14% | -1.04% | -0.69% | -0.37% | -0.88% | |
| NZD | -0.82% | -0.42% | -0.78% | -0.75% | -0.25% | 0.37% | -0.47% | |
| CHF | -0.31% | 0.04% | -0.27% | -0.18% | 0.25% | 0.88% | 0.47% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Bitcoin gathered bullish momentum during the Asian trading hours on Thursday and surged to a new record-high above $100,000. President-elect Donald Trump confirmed on Wednesday that he has nominated Patomak Global Partners CEO Paul Atkins, who is a widely known crypto advocate, to replace Gary Gensler as the next Chairman of the Securities & Exchange Commission (SEC).
Bank of Japan (BoJ) board member Toyoaki Nakamura said on Thursday that he is not against rate hikes but added that the decision should be data-dependent. "There will be plenty of data coming out before BoJ’s December meeting including Tankan, so want to scrutinize them in deciding whether rate hike would be appropriate," Nakamura noted. After rising more than 0.5% on Wednesday, USD/JPY stays on the back foot early Thursday and was last seen trading below 150.00.
The data from Germany showed that Factory Orders declined by 1.5% on a monthly basis in October. This reading followed the 7.2% increase recorded in September and came in slightly better than the market expectation for a decrease of 2%. EUR/USD clings to small gains above 1.0500 after failing to make a decisive move in either direction on Wednesday.
GBP/USD continues to edge higher and trades above 1.2700 after closing in positive territory on Wednesday.
Gold benefited from falling US Treasury bond yields and posted marginal gains on Wednesday. Nonetheless, XAU/USD remains stuck in a relatively tight channel slightly below $2,650 in the European morning on Thursday.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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