The dollar bounced off 3-month lows against European money
The U.S. dollar bounced off three-month lows against European currencies on May 20 after minutes from the FED’s last policy meeting revealed there was more talk of tapering their bond purchase than investors had thought.
In the Federal Reserve minutes, several policymakers announced that a discussion about reducing the pace of asset purchases would be appropriate at some point if the economic recovery continues to gain momentum.
The euro declined to $1.2174 from a three-month peak of Wednesday’s $1.2245.The American currency climbed to 109.21 yen from a one-week low of 108.575 yen hit on Wednesday.
The British sterling dipped to $1.4117 from above $1.42 earlier this week. The U.S. dollar’s index recovered from Wednesday’s three-month low to 90.209.
The greenback has been decreasing over the past few weeks as key Fed officials have repeatedly announced they were not ready to discuss reducing stimulus, judging spikes in inflation would be temporary.
According to Tapas Strickland, director of economics, markets at RBA in Sydney, the FOMC Minutes predate the latest CPI and payroll/earnings numbers, so the fears of the minority on the FOMC are expected to have become a little more acute since the April meeting.
The Fed minutes raised U.S. bond yields a tad, with the 10-year Treasuries yield at 1.671%, compared with about 1.65% just before the release of the minutes.
Cryptocurrencies were volatile after facing one of their biggest losses
Meanwhile, cryptocurrencies were volatile after facing one of their biggest losses on May 19. Cryptocurrencies were weighed on by China’s decision to ban financial and payment institutions from providing digital currency services, along with Tesla CEO Elon Musk’s announcement.
The dominant cryptocurrency in the world, Bitcoin, last traded down 3% at $35,654. The digital coin has fallen to as low as $30,066 on Wednesday, representing a whopping 54% decline from its all-time high reached just over a month ago.
Meanwhile, the second-largest cryptocurrency by market cap, Ether, fell more than 10% to as low as $2,168 after a 22.8% decline on Wednesday, its biggest daily slump since March 2020.
