SEC's Bitcoin Buzz: Dollar Steady, Bitcoin Drops - Catch Up on Today's Financial News

SEC Updates, Dollar Resilience, and the Bitcoin Rollercoaster

Jan 10, 2024 - 09:05
Jan 10, 2024 - 09:06
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SEC's Bitcoin Buzz: Dollar Steady, Bitcoin Drops - Catch Up on Today's Financial News
SEC's Bitcoin Buzz: Dollar Steady, Bitcoin Drops - Catch Up on Today's Financial News

U.S. dollar kept its ground on Wednesday in careful trading. Investors were on the edge, waiting for crucial news about U.S. inflation later this week. At the same time, Bitcoin faced a drop after the Securities and Exchange Commission (SEC) revealed that a fake message about approving exchange-traded funds (ETFs) for Bitcoin was posted on its social media account.

The SEC explained that someone briefly got into its social media account and spread false information about approving ETFs for Bitcoin. This news was eagerly anticipated by the crypto industry. Today, the SEC is set to decide on an application for a spot Bitcoin ETF from Ark Investments and 21Shares. Other big players like BlackRock, Fidelity, and VanEck also have pending ETF applications.

Due to the misleading post, Bitcoin's value went down by 3.3%, landing at $44,600 after reaching a high of $47,897. Many have been closely watching for a positive SEC decision on ETFs, as it could attract billions in new investments, influencing Bitcoin prices in recent months.

Market expert Chris Weston, the Head of Research at Pepperstone, shared his perspective: "The reality is most who have followed the saga have moved on, and the green light from the SEC is fully priced."

On the other side, the U.S. dollar index, which measures the dollar against other currencies, stayed at 102.49 after a small gain on Tuesday. This month, it has gone up by 1%, bouncing back from a 2% drop in December as traders reconsidered Federal Reserve rate cuts.

Looking back, the Fed surprised everyone in December by projecting 75 basis points (bps) of rate cuts in 2024. This significantly affected market expectations. While traders initially thought of as much as 160 bps of cuts, the current estimate is 140 bps of cuts for this year.

Now, all eyes are on the U.S. consumer price index report scheduled for Thursday. Experts predict a 0.2% increase in headline inflation for the month and a 3.2% rise annually.

Ipek Ozkardeskaya, a Senior Analyst at Swissquote Bank, said, "The consolidation in U.S. yields prevents a further selloff in the greenback before more clarity on inflation."

Tensions in the Red Sea, due to recent attacks by Yemen-based Houthis, have disrupted international trade between Europe and Asia, adding complexity to the economic situation.

In currency news, the euro saw a slight increase of 0.11% to $1.0944, while the yen went down by 0.57% to 145.29 per dollar. The Norwegian crown rose by 0.28% against the euro, influenced by data showing a bigger-than-expected fall in Norway's core inflation rate in December.

In Sweden, retail sales went down by 0.5% in November from October, and 1.7% year-on-year, leading to minimal change in the Swedish crown against the euro.

Morgan Stanley recommended long positions on NOK/SEK, noting changes in the Norges Bank's Norwegian crown sales and the end of the Riksbank's FX-hedging program. The lack of central bank flows could let NOK/SEK trade more on fundamentals, pointing to a higher NOK versus SEK, with Norwegian data performing better than Swedish data in the G10.

Also Read: Dollar Heading for Biggest Weekly Rise Since May Before Jobs Report

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