Dollar Snaps Two-day Winning Streak, Bitcoin Hovers Near Record Highs

NEW YORK: The dollar lost ground on Thursday, ending its first two-day winning streak in two weeks as disappointing labor market data tempered expectations for a speedy economic recovery from the global health crisis.

“Right around 2 am this morning the dollar got sold across the board,” said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto. “(That was) a precursor to the further weakness we’re seeing today.”

Bitcoin eased off its record high of $52,640 reached overnight. The cryptocurrency has surged roughly 78% so far this year as institutional interest ramps up, but some analysts warn that the rally might be unsustainable.

“Is (bitcoin) an asset class that the world should take more seriously? Perhaps,” Bregar added. “The bigger the institutional investment involved, the more interested I’ll get.”

An unexpected increase in weekly jobless claims dampened enthusiasm over otherwise upbeat data this week, the day after minutes from the U.S. Federal Reserve’s most recent monetary policy meeting showed the central bank was determined to continue supporting the economic recovery.

The dollar slightly pared its losses against a basket of world currencies on the news.

“Today, jobless claims came in higher than expected that put a little bit of support back under the dollar,” Bregar added. “And tomorrow, the market is going to forget about it and focus on something else.”

The dollar index was off 0.24% at 90.680 after two days of consecutive gains.

The euro gained 0.30% to $1.2077 after sliding 0.5% overnight, the most in two weeks.

The yen gained some ground against the greenback and was last almost flat at 105.800, but still below its 200-day moving average.

Sterling advanced 0.63% against the dollar and was last at 1.395, and hit a high against the euro of 86.525 pence. The pound is the best-performing G10 currency against the dollar this year.[GBP/]

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