TOKYO (Reuters) – The dollar fell to its lowest level in a week on Tuesday, as investors began to question the extent of a recent rally driven by expectations of a faster pandemic recovery in the United States than in Elsewhere.
The spot remained on bitcoin as it reached a record high of $ 47,000, based on an almost 20% increase overnight, which was the highest since 2017, after Tesla Inc announced an investment of 1, $ 5 billion in digital assets.
The dollar index fell 0.2% to 90.75 in the Asian session and fell to 90.963 for the first time since February 1.
The US currency has been retreating since Friday, when disappointing job data pulled the wind out of a two-week run that lifted it to a two-month high of 91.6.
Investors boosted the green dollar with faster vaccine launches in the United States compared to most other countries, and as Democrats switched to President Joe Biden’s $ 1.9 trillion COVID-19 aid package.
Many analysts, however, see the massive fiscal spending, coupled with the Federal Reserve’s continued ultra-light monetary policy, as bringing the dollar down in the long run.
“The bottom line is that a big stimulus is very likely to pass soon, exacerbating the widening of the US current account deficit and weighing the dollar,” Commonwealth Bank of Australia foreign exchange analyst Joseph Capurso said in a customer note.
The European “delayed” vaccination program will limit the euro in the short term, but the continent should catch up by summer, after which the single currency could rise to $ 1.28 for the first time since 2014, he said. .
The euro rose 0.2% on Tuesday to $ 1.20775, up from a two-month low of $ 1.9520 on Friday.
The British pound renewed its highs in May 2018, rising to $ 1.3784 in Asia. The last trading increased by 0.3% to 1.3774 USD.
The dollar fell 0.3% to 104.925 yen, after consolidating to 105.765 at the end of last week, for the first time since October.
Elsewhere, Tesla sent the rise of bitcoin saying Monday in its 2020 annual report that it has bought $ 1.5 billion in the world’s most popular cryptocurrency as part of its broad investment policy and expects to start accepting the asset. digital as payment for its products. “in the near future.”
“This is a turning point in the way we view digital currencies,” said Junichi Ishikawa, a foreign exchange strategist at IG Securities in Tokyo.
“From now on, bitcoin will truly be considered an asset available for selection by asset managers in their portfolios.”
Bitcoin traded at $ 46,400, after breaking a new record on Tuesday, at $ 47,565.86.
Ethereum’s rival virtual currency changed hands at $ 1,733.14 after hitting an unprecedented $ 1,784.85 on Monday.
Riskier fiat currencies also gained momentum as rising stock markets supported sentiment.
The Australian dollar gained 0.3% to 77.252 US cents, while its New Zealand counterpart added 0.4% to 72.47 US cents.
Westpac is targeting a 75-cent US advance for the New Zealand currency, strategist Imre Speizer wrote in a customer note released Tuesday.
“Markets have recognized NZ’s successful management of Covid and the economic recovery that followed, but recent economic data has
it surprised even the most optimistic experts “, it is said in the note.
Reporting by Kevin Buckland; additional reporting by Stanley White; Edited by Shri Navaratnam