Dollar steadies ahead of Fed decision as Bitcoin rebounds
The U.S. dollar held steady on Wednesday as investors shifted their focus to potential interest rate cuts in 2026, while bitcoin extended its recovery and hovered near a two-week high.
Bitcoin, the world’s largest cryptocurrency, rose 2% to $93,633.70 after jumping 6% in the previous session. The gains follow a sharp sell-off that began in late November, when the token lost more than $18,000 — its largest monthly dollar decline since May 2021, News.Az reports, citing Reuters.
Market analyst Tony Sycamore of IG said that as long as bitcoin stays above $80,537 — a key support level tested in April during tariff uncertainty — the cryptocurrency could climb toward the $95,000–$100,000 range before momentum cools.
The euro strengthened, rising 0.12% to $1.1640 after clearing its 50-day moving average. The currency has gained more than 12% this year, its strongest annual performance since 2017, supported by a weaker dollar and expectations of U.S. rate cuts next year. The European Central Bank, which meets in two weeks, is widely expected to keep rates unchanged.
In Asia, the Australian dollar touched a five-week high at $0.6584 after GDP data slightly missed forecasts. The Reserve Bank of Australia is expected to hold interest rates steady at its meeting next week. India’s rupee, meanwhile, breached the 90-per-dollar level amid weak trade and portfolio flows, despite solid economic growth.
The Japanese yen held at 155.70 per dollar as markets continued to price in the likelihood of a rate hike this month. Sterling inched up to $1.3235, the Swiss franc was stable at 0.8017 per dollar, and the New Zealand dollar traded at $0.5753.
Investors are also assessing the possibility that White House economic adviser Kevin Hassett could be nominated as the next Federal Reserve chair — a move that some expect would further weaken the dollar due to his support for faster rate cuts. President Donald Trump has said he will announce his pick early next year.
Analysts see room for more dollar weakness into 2026. Deutsche Bank strategist Tim Baker said the currency could fall around 2% in December, a month in which it has historically underperformed. Singapore’s OCBC also expects the dollar to decline as U.S. rate cuts narrow yield differentials with other major economies.
The dollar index slipped 0.1% to 99.202 and is on track for a nearly 9% decline this year.
Spectra Markets President Brent Donnelly said current conditions — a market heavily positioned in dollars, expectations of lower rates, fiscal pressures, and seasonal trends — point toward further downside for the greenback. “I am going long EUR/USD and NZD/USD,” he said.
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