Bitcoin has reached a three-month high in early Asia trading, supported by growing market interest as the U.S. presidential election approaches. The cryptocurrency is currently trading at $69,400, reflecting an 18% increase since October 10. The rising odds of former President Donald Trump winning the November 5 election have boosted Bitcoin, as his administration is perceived to adopt a softer stance on cryptocurrency regulation. This development is drawing attention to the potential for further gains in Bitcoin prices.
The U.S. dollar has shown strength across various markets, gaining momentum in anticipation of the upcoming election. The dollar index, which measures the currency against a basket of major rivals, stood at 103.45, recording a weekly gain of 0.55%. This surge comes despite a slight decline on Friday when China's stimulus announcement temporarily boosted risk appetite.
Market analysts attribute the dollar's strength to the prospect of Trump's policies, which could maintain higher interest rates in the U.S. while pressuring the currencies of trade partners. As election day draws closer, traders are placing bets on a stronger dollar against the euro, Swiss franc, and Mexican peso.
Last week, the yen experienced a slight drop, falling by 0.1% to 149.32 per dollar. Although the currency briefly breached the 150 per dollar level, it managed to stay on the stronger side. The euro, on the other hand, fell by 0.6% last week and is hovering around a two-and-a-half-month low at $1.0866. Meanwhile, sterling remained flat at approximately $1.3045.
Analysts suggest that the euro's decline is driven by factors such as the European Central Bank's dovish rate cut and strong U.S. economic data. These elements have delayed expectations for how quickly U.S. interest rates may drop, particularly if Trump secures another term in office.
With no major economic events expected this week, traders are focusing on corporate earnings and the risks associated with the U.S. election. Chris Weston, head of research at Pepperstone, noted that investors must decide if now is the right time to increase their exposure to election-related trades. As real interest rates continue to rise, some experts believe that the dollar's upward trend could persist beyond the election.
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Bitcoin hits a three-month high, fueled by U.S. election-driven market volatility. Discover how they are impacting Bitcoin.
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