The latest batch of data from the United States has not had a beneficial impact on the USD. Given that unemployment has risen by 0.2%, this is not surprising. But there is a light at the end of the tunnel. Inflation is declining in Hungary, and digital currency is breaking new records.
Continued Retreat from Dollar
The recent days on the markets have been challenging for the US currency. Friday’s job market data did not reverse this trend. Investors were greatly alarmed by the increase in unemployment to 3.9%. An increase of 0.2% within a month is objectively substantial. A certain peculiarity of the calendar should be noted, though. In these months, unemployment rates in the US generally rise, a phenomenon caused by the seasonality of certain jobs. Unemployment also rose by 0.2% in February last year, followed by a decrease over the next two months. What deserves attention is the better data from the job market. Once the fear of unemployment nearing the symbolic 4% threshold subsides, this data should translate into a strengthening of the US dollar. The higher-than-expected number of new jobs should suggest stabilization. However, based on the data alone, the dollar clearly tested a move towards the 1 Dollar 10 Cent level for 1 Euro. If this level was reached, we would be at levels reminiscent of the end of December and beginning of January on the world’s main pair.
Decrease in Inflation in Hungary
After the pace of price growth dropped from 5.5% to 3.8% last month, a slight rebound was expected. The data for February, however, did not rise to 4%, but saw another decline to 3.7%. Interestingly, this led to the Hungarian Forint strengthening against the euro. Why is this unusual? Faster declining inflation typically accelerates expectations for lower interest rates, which ordinarily weakens a currency, as the prospects for returns from it decrease. Here, however, we saw exactly the opposite effect. This is likely due to some calling the rate at which interest rates are falling in Hungary “crazy”. It doesn’t look like there is any option for the rate to speed up, even with more rapidly declining inflation.
Bitcoin Sets New Peaks
On Friday, there was an attempt to break through another significant psychological level. Namely, Bitcoin for $70,000. The attempt failed and the rate quickly rebounded. Over the weekend, we witnessed further attempts, as unlike most traditional exchanges, here trading is not halted. The weekend rebound was not as strong as Friday’s, which might indicate what was going to happen Monday morning. The moment European markets opened, frenzy began. Bitcoin rapidly rose by approximately 5%, not only breaking the level of $70,000, but at the time of writing, standing at $71,500. With the current USD exchange rate, that’s over 280,000 Polish Zlotys.
In today’s macroeconomic calendar, there are no major data. However, it should be noted that the Americans have already switched to daylight saving time.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl and Walutomat.pl.
