US dollar mixed
The dollar was mixed against its major trading partners. Booming economic data provided a slight boost for the dollar, but it seems FX markets are more focused on the developments with its trading partners. The euro continues to respect the 1.20 level, but optimism is growing now that vaccinations are improving across Western Europe. The Australian dollar was supported after a better-than-expected labor report showed they were the first nation to recover all their COVID lost jobs.
The Turkish lira rallied after CBRT Gov Kavcioglu’s first meeting saw him respect market forces and refrain from cutting interest rates. Pressure to cut rates from President Erdogan is still there, but that will be hard follow up on given the upward risks for inflation. As long as inflationary pressures do not skyrocket some more, Turkey could stand pat on rates for a couple more meetings.
The Russian ruble remained volatile and settled lower as fresh sanctions will likely see limited impact for the domestic economy.
Brevan Howard’s main hedge fund is about to join the cryptoverse. An initial investment of up to 1.5% of the fund, translates into about a USD84 million bet on cryptocurrencies. The bitcoin boom doesn’t want to stop and the Brevan Howard news is huge as it supports the argument that more funds will likely jump on the bitcoin bandwagon.
Day two of Coinbase trading is somewhat constructive as prices continue to trade above yesterday’s low. Considering early investors had no restrictions on selling, the crypto world should be pleased with how the crypto exchange share price traded early, which showed a tremendous amount of retail interest (USD57 million according to VandaTrack).
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