US Dollar Declines, Bitcoin Eyes $63K as Futures ETF Debuts Today

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Key Takeaways

US dollar continues to weaken across the currency market; dollar index falls to a 3-week low
Bitcoin is trading near $63,000 as market participants await ProShares’ Bitcoin ETF launch today

What’s on Focus in the Markets?

A weakening US dollar and a climbing bitcoin are defining the broader financial markets today. First, the currency market is seeing a decline in the value of the US dollar. The dollar index, which tracks the performance of the greenback against a basket of currencies, fell to a three-week low.

In more detail, the USD/CAD and the USD/CHF are lower by about half a percent each on the day. On the flip side, the EUR/USD and the GBP/USD are pushing higher on the back of a declining dollar. The EUR/USD, in particular, is in its fifth straight day of gains.

The bearish move in the US dollar comes amid increased uncertainty related to the US central bank. More precisely, the Federal Reserve is now under fire after documents revealed Fed policymakers personally traded stocks.

On that note, Fed Chair Powell is standing on shaky grounds in relation to his reappointment for another term. Still, Mr. Powell remains a top contender for the role after his current term ends in February next year.

What’s the Latest News on Bitcoin?

While currency traders look for opportunities in the moves of the US dollar, bitcoin zeroes in on $63,000. The original cryptocurrency is presently hovering near $62,400 with a session high of $62,950 made earlier today.

Crypto proponents this week witnessed the first-ever approval of a Bitcoin exchange-traded fund. That said, the Bitcoin Strategy ETF packaged by ProShares is set to debut on the NYSE today. The fund was freshly given the green light from the Securities and Exchange Commission yesterday.

The bitcoin futures ETF will be another way for traditional investors to access the crypto market. However, it’s worth noting that the ETF will not hold actual bitcoin. Instead, ProShares is offering futures contracts tied to the price of bitcoin. Currently, this is one of the few ways institutional investors can get a taste of the crypto frenzy.

Furthermore, a number of other Bitcoin-linked exchange-traded funds will be reviewed by the SEC this week.

Where Are Stocks Headed?

Stocks on Wall Street managed to close mostly higher on Monday. Early on Tuesday, futures contracts indicate a higher open for all three benchmarks. Dow futures were higher by about 0.2%, while S&P futures and Nasdaq futures were up 0.3% each before the bell.

In Europe, bourses wobbled in the initial hours of the session but later momentum arrived and stocks moved gradually higher.

What’s Next for Traders and Investors?

US housing numbers for September are scheduled for reporting today. The data will indicate whether new home purchases have moderated as analysts expect. In recent months, low rates and a slowdown in construction due to a shortage of materials have translated to strong demand from buyers.