Weaker Dollar Could Help Bitcoin Rise Again — Market Talk

1135 GMT - A weaker dollar, combined with an improvement in investors' appetite for taking risks, could help to lift bitcoin again, says LMAX Group's Joel Kruger in a note. Bitcoin falls 1.7% to 107,028 due to trade uncertainty and concerns about Middle East tensions. The DXY dollar index, which measures the dollar's value against a basket of currencies, falls to a three-year low of 97.789. "This U.S. dollar softness typically benefits crypto, supporting a potential rebound in bitcoin and ethereum as investors rotate back into riskier assets," the market strategist says. ([email protected])1128 GMT - The Japanese yen stands to gain against a weak dollar and could help to drag the U.S. currency even lower, says Saxo's John Hardy in a note. Reduced appetite for taking risk among investors combined with lower U.S. Treasury yields should lift the safe-haven yen, he says. Currently yen gains are limited as the dollar holds above key support levels. A break below 142.50 yen could open scope for more gains, however, as the dollar falls to a three-year low against a currency basket. "A quick challenge of that sub-142.50 range support could set up the clash with the titanic 140.00 level." The dollar falls 0.7% to a 6-day low of 143.38 yen, LSEG data show. ([email protected])1116 GMT - Tariff uncertainty could cause the dollar to drop further, Ballinger Group's Kyle Chapman says. The dollar falls to a three-year low against a currency basket and a three-and-a-half-year low against the euro. Late Wednesday, Trump said the U.S. would send letters to countries within two weeks detailing what their tariff rates would be. "The tariff drama is here to stay, and there is significant room for further dollar downside here if the U.S. economy begins to really suffer for it," Chapman says. The prospect of the U.S. Federal Reserve ramping up interest-rate cuts could lift the euro toward $1.20, he says. The DXY dollar index falls 0.8% to 97.789. The euro rises 1% to $1.1610, LSEG data show. ([email protected])1101 GMT - India's headline consumer price inflation has likely hit a floor after touching a 75-month low in May, Capital Economics says. That would vindicate the RBI's decision to frontload rate cuts and hint strongly that the easing cycle is at an end, says Shilan Shah, deputy chief emerging markets economist at CE. Core inflation is likely to have continued hovering around 4% in May, he adds. Underlying price pressures are likely to build over the coming months as economic growth holds up. "But we aren't expecting a sharp rise in core inflation given that household inflation expectations remain subdued," he adds. Any pick-up in inflation is likely to be gradual, suggesting that the RBI's repo rate can stay at 5.50% for a while yet. ([email protected])1053 GMT - The dollar index falls to a three-year low against a basket of currencies and a three-and-a-half year low against the euro. Trade uncertainty and Wednesday's below-forecast U.S. inflation data combine to weigh on the dollar, which extends losses after breaking below key chart levels. The euro also rises after European Central Bank executive board member Isabel Schnabel said the monetary policy cycle is "coming to an end" as inflation stabilizes around the central bank's target. The DXY dollar index falls to 97.861. The euro gains nearly 1% to $1.1596, its highest since late 2021, LSEG data show. ([email protected])1014 GMT - China could modestly increase funding for consumer goods trade-in subsidies in late 3Q or early 4Q if GDP growth drops below 4.5% in 3Q, Morgan Stanley analysts say in a research note. They note that some provinces have suspended the trade-in program as they may have run out of funds, while others are pacing the disbursement of subsidies. Retail sales of home appliance, office goods and mobile phones in May and June are close to 70% of sales in the first four months of 2025, and China's mid-year promotions started even earlier this year, they note. However, the recent suspension could also "reflect inherent limitations of such stimulus" to boost consumption in the long term, they say. ([email protected])0911 GMT - The dollar's selloff would likely intensify if the DXY dollar index were to break below the April 21 low of 97.921, says MUFG's Derek Halpenny in a note. This is "an obvious key support," the head of research says. A breach of that level would take the dollar to levels not seen since early 2022. The DXY index falls 0.5% to a seven-week low of 98.190, LSEG data show. ([email protected])0849 GMT - The Bank of Japan is expected to stand pat on rates next week and maintain its JGB taper plan until 1Q 2026, HSBC Global Research economists say. At its current pace of reducing JGB purchases by around 400 billion yen quarterly, the BOJ's monthly buying should fall to Y3 trillion in March from Y5.7 trillion in July 2024, say Frederic Neumann and Justin Feng. For fiscal 2026, they see purchases slowing to roughly Y200 billion a quarter. This would bring monthly purchases down to around Y2 trillion by March 2027. HSBC views Y2 trillion as a "natural" level since this was the amount of JGBs the BOJ purchased each month before the ultra-loose monetary policy was introduced in April 2013. ([email protected])0841 GMT - Bitcoin falls as concerns about trade and geopolitical tensions rattle risk sentiment, sending equity markets lower. Investors are concerned about the lack of detail emerging from this week's U.S.-China trade deal. Concerns about Middle East tensions are also growing after the U.S. ordered nonessential personnel out of parts of the region amid heightened security concerns. "Investor risk appetite has diminished overall due to the ongoing tensions in the trade conflict and geopolitical developments causing nervousness in the markets," says CMC's Jochen Stanzl in a note. Bitcoin falls 1% to $107,845, according to LSEG data. ([email protected])0830 GMT - Yields on U.K. government bonds, or gilts, fall after data showed the U.K. economy contracted by 0.3% in April as U.S. President Trump's tariff policy stung activity. This was a bigger drop than the 0.1% contraction that economists polled by The Wall Street Journal had expected and raises the chances of more interest-rate cuts by the Bank of England. The data suggest growth will be below the BOE's forecasts, although a rate reduction as early as this month looks unlikely, Citi analysts say in a note. The 10-year gilt yield falls around 5 basis points to a five-week low of 4.509%, Tradeweb data show. ([email protected])0823 GMT - The Bank of Korea is expected to pivot toward a more hawkish policy stance, Nomura economist Jeong Woo Park writes in a note. The central bank may deliver one more rate cut--rather than two--by end-2026, Park says. Gov. Rhee Chang-yong in his BOK anniversary speech earlier in the day reiterated concerns about rising home prices and emphasized structural reforms over stimulus to address the country's slowing growth. That suggests a shallower rate-cut path down the road, the economist says. Nomura forecasts one more 25-basis-point BOK rate reduction, possibly in February 2026, for the current easing cycle. ([email protected])0823 GMT - Deutsche Bank CEO Christian Sewing is hopeful Germany's new ruling coalition will spur consumers to spend more. Saving ratios among the lender's retail clients are running close to peaks seen during the Covid-19 pandemic. "The ratio of what has been saved from the net income of private clients, retail clients, was almost as high as the peak of Covid times," Sewing tells a Goldman Sachs conference in Berlin. Sewing expects the plans of the new German government to be net positive for Deutsche Bank. However, things are moving slowly and the benefits to economic growth of Chancellor Friedrich Merz's 500 billion-euro infrastructure fund will start to show up in 2026, Sewing says. Shares in Deutsche Bank fall 1.6%. ([email protected])