The Elon Effect: Dollar Weakens After Elon Musk’s $1.5 Billion Bet On Bitcoin

The dollar weakened earlier today, trading near its lowest in a week after Elon Musk’s $1.5 billion investment in Bitcoin was widely interpreted by market participants as a vote of no-confidence in a currency (U.S dollar) that is currently under pressure from loose fiscal (Government) and monetary (Federal Reserve) policy.

At 08:55 GMT, the Dollar Index, which tracks the dollar against a basket of six other currencies, was down 0.3% at 90.638, a continuation from the weakness seen after Friday’s disappointing U.S. jobs data- recall that the employment rate failed to meet investors expectations. The drop on Friday brought an end to the two-week bullish run of the dollar.

As a result of the weakened dollar, USD/JPY traded down 0.4% at 104.77, GBP/USD was up 0.3% at 1.3779, EUR/USD climbed 0.3% to 1.2094, while the risk-sensitive AUD/USD rose 0.3% to 0.7726.

How do you think the dollar will fare for the rest of the weak? Do you see a recovery insight or do you expect this drop to persist for the rest of the week?

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