Gertrude Chavez-Dreyfuss and Harry Robertson
NEW YORK/LONDON (Reuters) – The euro gained against the dollar on Thursday as French government bonds stabilized a day after the collapse of the French government, while bitcoin galloped to a record high of more than $100,000 as investors cheered the pro-cryptocurrency’s nomination to lead the U.S. Commission Securities and Exchanges.
Despite Thursday’s gains, the euro was on track to post a loss this week, its fourth in the last five weeks.
French President Emmanuel Macron met with allies and parliamentary leaders on Thursday in a bid to quickly appoint a modern prime minister to replace Michel Barnier, who officially resigned a day after opposition lawmakers voted to reject his government.
According to Shaun Osborne, the company’s chief currency strategist, this is not an uncomplicated task Scotiabank (TSX:) in Toronto.
“For now, local bonds have stabilized – better OATs have closed the yield gap on 10-year Bunds – helping to moderate the euro’s recovery,” he wrote in a research note, referring to French bonds.
The gap between French and German 10-year bond yields narrowed to 77.2 basis points (bps) on Thursday, the largest difference since November 22.
He added that positive short-term price action on Wednesday, coupled with moderate gains to $1.05 on Thursday, gave “the euro a chance to strengthen slightly higher to test key resistance and potential bullish momentum at $1.0590.”
Meanwhile, bitcoin, the world’s best-known cryptocurrency, has been on a tear since November amid expectations that Donald Trump’s victory in the US elections would usher in a affable regulatory environment for cryptocurrencies.
It rose to an all-time high of $103,649 in Asian hours, boosted in part by President-elect Trump’s nomination of cryptocurrency proponent Paul Atkins as SEC director. It was recently up 4% at 101,523, a year-to-date augment of over 140%.
“With an improved regulatory environment in the U.S. and next-generation stablecoins driving adoption in Europe, we believe bitcoin and the broader cryptocurrency market can continue to grow from strength to strength,” wrote Arnoud Star Busmann, chief executive of Quantoz Payments, a Dutch payments technology company.
REALLY EURO
The euro was last up 0.6% at $1.0567, away from a two-year low of $1.0332 in overdue November, as investors braced for a drawn-out settlement for France.
French lawmakers passed a vote of no confidence in the government on Wednesday night, plunging the country into an even deeper crisis that threatens its ability to tame a huge budget deficit.
Traders are almost certain that the European Central Bank will cut interest rates next week and are pricing in a rate cut of around 157 basis points by the end of 2025.
In Asia, the Japanese yen rose as high as 149.66 per dollar, but was last up 0.3% at 150.18 as investors wondered whether the Bank of Japan would raise interest rates later this month. Analysts say dovish politician Toyoaki Nakamura’s comments that he is not opposed to interest rate increases helped strengthen the currency.
Expectations grew that the BOJ would raise interest rates at its December 18–19 meeting, fueled by comments from Governor Kazuo Ueda. However, media reports published on Wednesday suggested that the BOJ may skip an interest rate augment this month, nullifying those bets.
The South Korean won fell slightly after the Ministry of Finance said the government would release stabilization funds worth 40 trillion won ($28.35 billion) following the chaos that followed President Yoon Suk Yeol’s declaration of martial law on Tuesday and its subsequent rescission. .
The won was last down 0.2% at 1,416 per US dollar.
The index, which measures the U.S. currency against six rivals, fell 0.5% to 105.83.
It extended losses after data showed claims for state unemployment benefits rose by 9,000 to a seasonally adjusted 224,000 in the week ended Nov. 30. Economists polled by Reuters had forecast 215,000 claims as of last week.
On Wednesday, Federal Reserve Chairman Jerome Powell said the U.S. economy is now stronger than the central bank expected when it began cutting interest rates in September, and appeared to signal his support for a slower pace of cuts going forward.
However, bets on Fed interest rate cuts remained broadly stable, perhaps under the influence of weaker-than-expected data from the services sector released on Wednesday and higher-than-expected jobless claims. Markets estimate about a 70% chance of a 25 bp rate cut at the end of the month and a 30% chance of a pause.
Currency
offer
prices per hour
5
December
04:13
afternoon GMT
Description RIC Last US Pct YTD Pct High Low
to Close Change offer Offer
Previous
Session
Dollar 105.85 106.34 -0.45% 4.42% 106.37 105.
index 72
Euro/Dollar 1.057 1.0509 0.59% -4.23% 1.059 USD 1.0
it’s 509
Dollar/Ye 150.3 150.49 -0.14% 6.54% 150.76 149.
No. 69
Euro/Yen 158.83 158.29 0.37% 2.09% 159.38 157.
57
Dollar/Sw 0.8793 0.8847 -0.6% 4.49% 0.8852 0.87
it’s 89
Sterling sterling/ 1.2752 1.2702 0.4% 0.22% 1.2771 $1.2
Dollar 696
Dollar/Katwa 1.4032 1.4074 -0.28% 5.87% 1.4078 1.40
nadian 11
Australian/Up to 0.6435 0.643 0.14% -5.56% 0.6453 USD 0.6
422
Euro/Swiss 0.9294 0.9292 0.02% 0.09% 0.9322 0.92
91
Euro/Christmas 0.8286 0.8277 0.11% -4.38% 0.8294 0.82
1973’s
New Zealand 0.587 0.5852 0.35% -7.07% $0.5881 0.58
Dollar/Up to 49
ll
Dollar/No 11.0443 11.0513 -0.06% 8.97% 11.0809 11.0
road 11
Euro/Norway 11.6803 11.6168 0.55% 4.07% 11.6836 11.6
it’s 124
Dollar/Sw 10.8766 10.9227 -0.42% 8.04% 10.9454 10.8
Eden 5
Euro/Sweden 11.4975 11.4815 0.14% 3.34% 11.5235 11.4
in 83
