The euro strengthened on Thursday, buoyed by resilience in the market despite the anticipated collapse of the French government. Bitcoin, meanwhile, soared past the $100,000 mark for the first time ever, while the yen gained momentum ahead of the Bank of Japan’s decision on December 19.
Bitcoin, the world’s leading cryptocurrency, has seen an impressive surge since November, spurred by the expectation that Donald Trump’s victory in the U.S. election would foster a more crypto-friendly regulatory landscape.
On Thursday, Bitcoin reached a new all-time high of $103,619 in Asian trading, following Trump’s nomination of Paul Atkins, a crypto advocate, to head the U.S. Securities and Exchange Commission. At the time of writing, Bitcoin was priced at $103,050, reflecting a 5% daily increase and a staggering 140% year-to-date gain.
Kyle Rodda, Senior Financial Market Analyst at Capital.Com, suggested that Bitcoin’s rally could continue due to the favorable regulatory environment emerging in the U.S.
The euro advanced 0.16% to $1.0525, though it remains close to its two-year low of $1.0332 hit at the end of November. The rise came amid political turmoil in France, as French lawmakers passed a no-confidence vote, exacerbating the country’s ongoing political crisis and budget deficit issues. Despite concerns, the euro managed to hold steady due to market expectations that the collapse of the French government had already been priced in.
Lee Hardman, Senior Currency Analyst at MUFG, noted that the impact of France’s political crisis on broader European markets appeared limited, as bond spreads between Germany, Italy, and Spain have been narrowing.
Expectations are building that the European Central Bank will cut rates next week, with the market pricing in 157 basis points of easing by the end of 2025.
Yen Strengthens Ahead of Bank of Japan Meeting
In Asia, the Japanese yen rose over 0.3% to 150.80 per dollar, driven by growing speculation that the Bank of Japan (BOJ) could raise interest rates at its December meeting. A statement from typically dovish BOJ policymaker Toyoaki Nakamura, signaling no opposition to rate hikes, helped fuel the yen’s gains.
While comments from BOJ Governor Kazuo Ueda had suggested a possible rate hike, recent media reports have raised doubts about the bank’s decision to move forward with such a hike, leaving traders uncertain.
The South Korean won dipped slightly as the country’s finance ministry announced a market stabilization fund worth 40 trillion won ($28.35 billion) after a period of market turmoil following President Yoon Suk Yeol’s announcement and retraction of martial law.
Meanwhile, the dollar index, which tracks the U.S. currency against six rivals, saw a slight decline to 106.18.
The British pound edged up 0.15% to $1.2721, while the Australian dollar held steady at $0.6431, recovering from a 0.9% drop on the previous day due to weak economic data.
In the U.S., Federal Reserve Chair Jerome Powell indicated that the economy is stronger than anticipated, which may lead to a slower pace of rate cuts moving forward. Despite this, markets are still pricing in a 74% chance of a 25-basis-point rate cut later this month.
All Eyes on U.S. Non-Farm Payrolls Report
The key event for global markets this week is the U.S. non-farm payrolls report, due Friday, which is expected to show an addition of 200,000 jobs in November. This would be a significant recovery after just 12,000 jobs were added in October, the lowest number since December 2020.
