Dollar rises after claims data, bitcoin climb continues

The US Dollar (USD) rose in choppy trading on Thursday as investors assessed the latest data on the labor market and comments from Federal Reserve officials for the path of interest rates, while bitcoin continued its march toward the $100,000 level.

Weekly initial jobless claims dropped 6,000 to a seasonally adjusted 213,000, a seven-month low, and below the 220,000 estimates of economists polled by Reuters, indicating job growth rebounded after being disrupted by hurricanes and labor strikes last month.

However, the reported also indicated labor market slack as it is taking longer for the unemployed to find new jobs, as unemployment rolls grew to their highest levels in three years, giving the Fed cushion to cut rates again in December.

The dollar index , which measures the greenback against a basket of currencies, rose 0.1% to 106.73, with the euro down 0.28% at $1.0513.

“Some of the Trump-trade euphoria that was in the market is starting to wear off a little bit, but it’s still there and people are still rebalancing their portfolios, which is driving things towards the dollar generally speaking, at the margin today,” said Brad Bechtel, global head of FX at Jefferies in New York.

“We’re just in this what I call the chop zone, we’re just sort of consolidating the recent news that we saw in a lot of these currencies related to the Trump trades.”

Bitcoin continued its recent rally that has seen the cryptocurrency surge more than 40% since the U.S. election on expectations President-elect Donald Trump will loosen the regulatory environment for cryptocurrencies.

Bitcoin was last up 2.28% to $96,616.34 after reaching a record high of $98,367.

Recent comments from Fed officials, including Chair Jerome Powell, have indicated the central bank may take a slower course in its rate cut path, while concerns that Trump’s policies could reignite inflation have helped push the dollar to a one-year high of 107.07 last week.

European Central Bank policymaker Francois Villeroy de Galhau said tariff hikes under the new Trump administration do not shift the inflation outlook in Europe.

Expectations for the path of rate cuts have been scaled back recently. Markets are pricing in a 55.5% chance of a 25-basis-point cut at the Fed’s December meeting, down from 72.2% a week ago, according to CME’s FedWatch Tool.

Federal Reserve Bank of New York President John Williams told Barron’s in an interview published on Thursday that he sees inflation cooling and interest rates falling further while Federal Reserve Bank of Richmond President Tom Barkin said in an interview with the Financial Times that the U.S. is more vulnerable to inflationary shocks than in the past.
Safe-haven currencies such as the Japanese yen and Swiss franc strengthened on the latest potential signs of the conflict between Ukraine and Russia escalating.

Against the Japanese yen , the dollar weakened 0.93% to 153.98 and against the Swiss franc , the dollar was down 0.07% to 0.883.

Bank of Japan Governor Kazuo Ueda said on Thursday the central bank would “seriously” take into account foreign exchange rate moves in compiling its economic and price forecasts.