US dollar hits new highs as Bitcoin sinks to $60k

DXY, a major US dollar index, soared to a new year-to-date peak Tuesday, bolstered by an array of strong US currency movements and encouraging employment data. The Employment Cost Index (ECI) surged with a 1.2% growth in Q1 2024, hinting at strong employment data to come. This US dollar appreciation ahead of the impending Fed meeting and further employment reports shows traders are anticipating signals that interest rates will remain high throughout 2024.

Bitcoin hits $60k in a disappointing end to April

After reaching all-time highs in March, Bitcoin has turned around, concluding April at around $60,000—a 13% drop from the beginning of the month. However, BTC prices are still up considerably year-to-date and volatility remains high, meaning a wide range of prices are possible for May and beyond.

Bitcoin prices increasingly uncorrelated to US dollar

As both Bitcoin and the US dollar have appreciated through 2024, their 12-month rolling correlation nears zero, challenging previous notions of their historically inverse relationship. Today’s dramatic market activity, however, prompts speculation whether the traditional negative correlation could be strengthening once again.

Big week for US dollar with Fed meeting, jobs data to come

US markets brace for a pivotal week with the Federal Reserve’s meeting on interest rate policies tomorrow, where expectations have evolved from the March projection of 2-3 cuts to potentially none. This meeting, along with the release of significant labor market data such as Nonfarm Payrolls on Friday, is awaited eagerly, following strong employment figures in 2024 that may influence the course of the US dollar.