US Dollar Index Slides on US-China Trade Talks, Could Bitcoin Uptrend be Coming?


US Dollar index took a hit on the prospect that the US and China would be able to hammer out a deal. The greenback actually hit a wave of selling order in its 2019 peak area i.e. 97.20.

If the two sides cannot reach a deal by the deadline that is March 1, there would be an increase in costs and pain in the sectors ranging from consumer electronics to agriculture as US tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent.

“There is very little detail behind some of those (Trump's) comments… There has been nothing really strong enough to drive any strong conviction (for investors),” said ANZ analyst Daniel Hynes.

There have been rising speculations of a potential US-China agreement and the possibility of a significant announcement has renewed the interest in riskier assets that led to a limited rise in gold.

“The safe-haven buying that we saw earlier in the month is now a little more fragile (after recent developments in trade talks),” Hynes said. The dollar suffered against its Asian peers and was marginally lower.

“Any progress in the talks would likely weaken the dollar and elevate gold slightly from here,” said INTL FCStone analyst Edward Meir.

As for yuan, recently Carie Le, at OCBC Wing Hang Bank Ltd. in Hong Kong told Bloomberg,

“The yuan has been tracking the dollar as it’s not the best time to place large long or short bets on the currency due to uncertainty over the trade talks. The yuan may advance if a partial deal is reached. But in the coming two to three months, it will trade between 6.7 and 6.9 because of weaker fundamentals and narrowing China-U.S. rate differentials.”

Meanwhile, the economy of China is slowing and credit-infused stimulus is limited. China needs the trade war to end and can’t have US trade representative (USTR) Robert Lighthizer, who is in Beijing this week for trade talks, to double down on the tariffs.

Recently, White House adviser Kellyanne Conway stated,

“He wants to meet with President Xi very soon. This president wants a deal. He wants it to be fair to Americans and American workers and American interests.”

Bitcoin in Green around $3,630

The renewed optimism over US-China trade war had the stock markets see greens after President Donald Trump said he may let the trade deal deadline “slide” if the two sides were to  make enough progress.

Bitcoin is barely in the green by 0.03 percent, at press time. The leading cryptocurrency is trading at $3,635. Due to the inverse relationship between the US dollar and Bitcoin, if greenback takes a dip, Bitcoin can see an uptrend as market trader Benjamin Blunts recently called out.

“DXY target hit and now printing a reversal candle. This bodes well for BTC. People who deny the correlation are like flat earthers to me.”

Since, nearly closing $3,700 from $3,400 on February 8th, Bitcoin has been trading between the range of $3,620 and $3,690. So, it’s yet to be seen if greenback will see another slide and Bitcoin would be able to break above $4k.

https://bitcoinexchangeguide.com/bitcoin-btc-ethereum-eth-xrp-ripple-and-bch-price-analysis-watch-feb-13th/

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