Bitcoin Price Rises, While Euro Drifts Down to New Lows, US Dollar Firms

| Updated
by Anastasiya Vanyukevich · 3 min read
Bitcoin Price Rises, While Euro Drifts Down to New Lows, US Dollar Firms
Photo: Dennis Skley/Flickr

The dollar fell across the board today while investors believe that its fast rise could affect the Federal Reserve to be a little more cautious about raising interest rates this year.

The U.S. dollar fell across the board today while investors believe that its fast rise could affect the Federal Reserve to be a little more cautious about raising interest rates this year.

“The greenback has risen about 24 percent against a major currency basket since May, and it could become a key issue at this week’s Fed monetary policy meeting,” Reuters says.

“The concern … is that the dollar has gone too fast too soon, and this could affect the Fed’s inflation goal,” explained Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

There’re also some doubts regarding the U.S. labor market, confirmed Brian Dolan, head market strategist at online brokerage platform DriveWealth in Chatham, New Jersey.

“While much has been made of the U.S. recovery, recent data, apart from large gains in monthly jobs numbers, suggest there is still plenty of room for caution,” the specialist explained.

The strength of the dollar has been a source of concern in U.S. equities markets because of the effect on the profits of multinational corporations.

“Earnings estimates for 2015 continue to be marked down, in large part because of the strength of the dollar. Any relief from the dollar’s strength means relief on that profit headwind, and a re-acceleration in profit growth is what the market is looking for,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Thus, the euro rose 0.7 percent $1.0569, after reaching its biggest weekly fall since September 2011 last week. It has lost about a quarter of its value against the dollar since mid-2014.

Comments by Italy’s central bank governor that the euro has fallen faster than the European Central Bank expected contributed to the currency’s rise on Monday as the European Central Bank launched quantitative easing.

Meanwhile, Bitcoin price continues to grow because of several factors. One of the is the fact that IBM is thinking over the necessity to apply special blockchain technology to start a digital cash and payment system for traditional currencies.

The company wants to allow customers make instant payments using the innovative technology and at the same time make them save on transaction fees. The mentioned above technology may appear quite useful as it allows customers to transfer money anonymously and instantly, avoiding government regulation.

Sources familiar with the matter disclosed that the transactions would be in “an open ledger of a specific country’s currency such as the dollar or euro.” Moreover, it’s not going to be controlled by some company or bank.

“When somebody wants to transact in the system, instead of you trying to acquire a bitcoin, you simply say, here are some U.S. dollars,” the unidentified source said. “It’s sort of a bitcoin but without the bitcoin.”

There’re also reports that the new digital currency system would be controlled by central banks. “These coins will be part of the money supply. It’s the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain,” another source added.

There’s a possibility that the digital currency could be linked to a person’s bank account. “We are at a tipping point right now. It’s making a lot more sense for some type of digital cash in the system, that not only saves our government money, but also is a lot more convenient and secure for individuals to use,” the source said.

Bitcoin News, Cryptocurrency News, News
Anastasiya Vanyukevich

Being the main author of TheBlogIsMine news portal in the past, Anastasia has significant experience in observing such fields as tech and business. Now she wants to explore a new area – FinTech. Passionate researcher on technology topics eager to know about what's shaping the future – and how to respond.

Related Articles