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NEW YORK (Reuters) - The dollar dipped to three-week lows on Wednesday as Treasury yields held below recent highs, reducing the relative attractiveness of the U.S. currency.
FILE PHOTO: U.S. one dollar banknotes are seen in front of displayed stock graph in this illustration taken February 8, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
The dollar has gained this year as Treasury yields rose on expectations of faster growth and higher inflation. That trade has paused this month, however, with yields stabilizing below one-year highs reached last month.
“The whole pro dollar trade is based upon the yield story and given the fact that the yield story has backed off the highs, the dollar has pretty much done the same thing,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
Inflation fears and a lack of pricing power could be factors in the recent weakness of the Russell 2000, Boris Schlossberg of BK Asset Management said.
Price Analysis
Following in the footsteps of Morgan Stanley, Goldman Sachs has announced plans to allow its wealth management clients to trade in cryptocurrencies and other digital assets. In an interview with CNBC, Mary Rich, the global head of digital assets for Goldman Sachs private wealth management division, said that the rollout may happen sometime in the second quarter of 2021.
Bitcoin adoption by two of the world’s preeminent investment banks is likely to force other banks to walk down the crypto path sooner than later. The arrival of fresh money from the clients of these legacy institutions may further increase demand and boost prices higher.
Bitcoin’s (BTC) recent gains may be short-lived and “the whole rally in crypto is getting very long in the tooth,” according to Boris Schlossberg, a leading foreign exchange expert.
What Happened: “I think we’re very, very close to perhaps an intermediate-term top here. A little bit of a correction is certainly due at this point,” Boris Schlossberg, managing director of FX strategy at BK Asset Management, said Tuesday on CNBC’s “Trading Nation.”
BTC traded 0.54% lower at $59,354.38 over the past 24 hours at press time, but was up 11.2% over the past week, indicating a recovery. It has an all-time high of $61,683, hit last month.