Bitcoin rises, dollar falls on expectations of a US-Iran 'end to the war'

Source

Minseung Kang

Summary

After President Trump’s remark that the war is "in its final stages," the dollar index and the Bloomberg Dollar Spot Index fell.
With Bitcoin rising 3.9% over 24 hours to $68,972 on Coinbase, risk appetite was seen to be returning.
Gold futures and silver futures gained 0.8% and 3.7%, respectively, as confidence in gold’s long-term uptrend remained intact.

Forecast Trend Report by Period

Trump: "The war is in its final stages"

Funds that had been flocking to the dollar, a safe haven

Shift toward risk assets

Treasury yields also pare gains

Gold rises on expectations of a prolonged upswing

Major financial assets including Bitcoin (BTC) and the dollar swung sharply as expectations for an end to the war spread after US President Donald Trump said the Iran war would soon be over.

After Trump said in a phone interview with US broadcaster CBS on the 9th (local time) that he believes "the war is in its final stages," the Bloomberg Dollar Spot Index slipped 0.1%. The dollar index, which measures the greenback against six major currencies, also fell about 0.27% on the day. The move reflects that some of the funds that had rushed into the US dollar as a safe haven during the crisis shifted into risk assets.

Pat Roach, an FX strategist at JPMorgan Chase, said, "Trump’s remarks were a welcome sense of relief for markets that had been under pressure," adding, "We’ll have to see whether this situation actually persists."

US Treasury yields, also viewed as a safe haven, pared gains. The 10-year Treasury yield, which had jumped intraday to as high as 4.21%, ended at 4.09%, down about 0.04% point.

Early in the war, concerns about inflation driven by a surge in oil prices kept upward pressure on Treasury yields. But as views emerged that the war could end sooner than expected, some of the tension in markets eased.

Gold and silver rebounded. As of 9:17 a.m. Korea time on the 10th, April-delivery gold futures were at $5,144 per ounce, up 0.8% from the previous session. Silver futures rebounded 3.7%. Although war concerns have eased somewhat, this is seen as reflecting investors’ continued conviction in gold’s long-term uptrend.

Bitcoin also turned higher. According to cryptocurrency exchange Coinbase, at the same time Bitcoin was at $68,972, rebounding 3.9% from 24 hours earlier.

Vipin Rai, a managing director at BMO Asset Management, said, "From the market’s perspective, some of the possibility of an extreme rise in energy prices has been removed, but it hasn’t disappeared entirely."

New York=Park Shin-young, correspondent nyusos@hankyung.com

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