The dollar stabilized against the euro on Tuesday as investors awaited the European Central Bank’s decision on interest rates and U.S. employment figures later in the week. Meanwhile, Bitcoin approached a record high level, showing no signs of decline in the latest wave of cryptocurrency frenzy. The Chinese yuan remained unchanged after Beijing set an ambitious economic growth target of around 5% for 2024, as widely expected.
The European Central Bank is set to meet on Thursday, with expectations widely held that interest rates will remain at a record level of 4%. Investors will be watching for any hints about when interest rates might start to decrease, along with examining updated economic forecasts. The U.S. employment numbers for February are likely to cause ripples in global markets on Friday. Economists anticipate a slowdown in employment from the previous month, but a larger-than-expected figure could lead to a 2.5% increase in the dollar this year.
Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on Wednesday and Thursday, while cryptocurrency fervor continues. Bitcoin is trading around $66,500, slightly below the earlier session peak of $68,828 and just below the record high of $68,999.99 reached in November 2021. The largest cryptocurrency by market capitalization has risen approximately 58% this year, benefiting from inflows into exchange-traded funds launched in the United States.
Early news from the National People’s Congress in China contained few surprises, with Beijing committing to a 5% economic growth target and a 3% budget deficit. Analysts at Nomura Bank suggest that achieving the growth target will be challenging without further stimulus. Markets currently indicate a roughly 65% probability that the Federal Reserve will begin reducing U.S. interest rates in June, with expectations of a 75-basis-point cut this year.
Powell is likely to reinforce the message that the Federal Reserve wants to wait for more data in his congressional testimony. In England, the pound sterling declined 0.1% against the dollar ahead of the British budget release on Wednesday. Chancellor Jeremy Hunt seeks to calm speculation about significant tax cuts before the elections.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
