Dollar Resumes Rise Ahead of US Inflation, Bitcoin at Two-Year Low

The dollar rebounded on Wednesday, taking advantage of its safe haven status in the aftermath of the US midterm elections and ahead of the US inflation report on Thursday, while bitcoin continued its plunge.

Around 8:00 p.m. GMT, the greenback rose by 0.64% against the euro at 1.0009 dollars for one euro and 1.65% against the British pound at 1.1353 dollars.

The greenback benefited in particular from the geopolitical risk while the Kremlin has already affirmed that relations will remain bad with Washington.

“It gives a boost to the safe haven status of the dollar,” said AFP Stephen Innes, an analyst at SPI AM, who also noted the pessimism of British construction giant Taylor Wimpey in its results, adding to concerns over the economic activity in the UK.

But since last Friday, the greenback remains down against the euro after four sessions of decline.

“The outcome of the midterm elections is unclear, but the likely scenario of a Republican-dominated Congress is contributing to dollar weakness as it would mean government spending will drop and open the door to less than Fed action,” said Ricardo Evangelista, analyst at ActivTrades.

Not all results are known yet. The Republican opposition should dominate the House of Representatives but not to the extent that was expected, the Republican wave having not taken place. As for the Senate, four seats are still uncertain.

But traders’ attention was now shifting to inflation in the US, with the CPI price index being released on Thursday for the month of October.

Analysts are still forecasting a monthly increase of 0.5% after +0.6% in September. Over one year, however, inflation could ease to 7.9% from 8.2%, according to Marketwatch.

“Caution is advised on the eve of the release given its importance to Federal Reserve policy in the near term,” Sucden analysts warn.

On the cryptocurrency side, bitcoin fell 10.21% to 16,789, a new low since November 2020, when the market boom of the past two years began.

The setbacks of the FTX platform, which had to call on its rival Binance to deal with a liquidity problem and will now sell most of its business to it, adds to concerns about the sector.

Wednesday class Tuesday class


8:00 p.m. GMT 9:00 p.m. GMT


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