Bitcoin clings to Tesla gains, dollar set for weekly loss
LONDON (Reuters) – Bitcoin hovered close to record highs on Friday, set for gains of over 20% in a milestone week marked by the endorsement of major firms such as Elon Musk’s Tesla, while the dollar pared losses that were incurred after weak U.S. jobs data.
The world’s most popular cryptocurrency traded about 0.5% down at $47,728, just south of a record high of $49,000 reached after U.S. banking group BNY Mellon said it had formed a unit to help clients hold, transfer, and issue digital assets.
Tesla revealed on Monday it had bought $1.5 billion worth of the cryptocurrency and BlackRock, the world’s largest asset manager, added bitcoin as an eligible investment to two funds.
Credit card giant Mastercard’s plans to offer support for some cryptocurrencies also boosted bitcoin’s ambitions towards mainstream finance, but many banks are reluctant to engage with it.
“We do not cover other speculative objects such as vintage cars, works of art or expensive watches”, Commerzbank Research said in a note on why it would not comment on the bitcoin exchange rate that some analysts say could test $50,000 soon.
“There is clearly some nervousness around this level”, Oanda analyst Craig Erlam told his clients, citing fears that a correction could hit soon after the $50,000 landmark is reached.
Elsewhere the dollar index ticked up 0.26% at 90.644 after subdued volumes in Asia due to the Lunar New Year.
It was, however, on track to fall 0.5% for the week – its first losing week in three – in what ING analysts described as a “consolidative mood” amid uncertainty about the pace of the U.S. economic recovery.
Weaker-than-expected weekly U.S. jobless claims data on Thursday added to concerns the dollar’s previous rally had priced in too fast a rebound for the U.S. economy.
The dollar was up 0.3% against the yen at 105.03.
There has been a divergence in views among traders this year over how U.S. President Joe Biden’s planned $1.9 trillion fiscal stimulus package will affect the dollar.
Some see it as bolstering the currency as it should speed a U.S. recovery relative to other countries, while others reckoned it would feed a global reflation narrative that should lift riskier assets at the dollar’s expense.
The euro slipped 0.25% to $1.2102 and briefly crossed below the $1.21 line but was headed to a 0.4% weekly advance.
The British pound slipped below $1.38 against the dollar but was steady against the euro after data showed Britain’s economy suffered a record slump in 2020, but grew in the final quarter.
Norway’s crown strengthened slightly and pared some losses against the euro after data showed the country’s economy contracted by 2.5% last year, a decline less severe than in most other European nations.
It traded last at 10.2980, broadly flat against the euro on the day.
Source: Read Full Article