Dollar pulls back, bitcoin jumps ahead of ETF approval deadline

The dollar’s rally took a pause as traders bet on Federal Reserve rate cuts due to slowing inflation in the U.S. Bitcoin, meanwhile, reached its highest level since April 2022 on expectations of spot bitcoin exchange-traded funds being approved soon. The euro strengthened from a recent low, while the yen also distanced itself from the 145 per dollar level. The New York Fed’s survey showed that U.S. consumers’ inflation expectations fell to a three-year low in December. This week’s U.S. inflation reading will provide further clarity on potential rate cuts by the Fed.