Home Forex Unexpected manufacturing boom in March boosts US dollar, sends cryptocurrencies tumbling

Unexpected manufacturing boom in March boosts US dollar, sends cryptocurrencies tumbling

by SuperiorInvest

and saw major price swings as they recovered thanks to strong US manufacturing data.

The cryptocurrency market has seen significant volatility over the past month, with Bitcoin () and Ethereum () showing significant price fluctuations.

At its peak during the period, Bitcoin traded at the $73,000 level and Ethereum at the $4,000 level. Today, both cryptocurrencies saw a significant drop, with Bitcoin down more than 5% to $66,010 at the time of writing and Ethereum down to $3,336, a drop of more than 4%.

Meanwhile, the (DXY) rallied to a four-and-a-half-month high, boosted by a better-than-expected March US Manufacturing PMI report.

Bitcoin and Ethereum see a drop of more than 4%

From March 2, 2024 to April 2, 2024, the price of Bitcoin ranged between a high of $73,740.9 and a low of $60,138.2. On April 2, 2024, the price of Bitcoin stood at $66,010.9, which is a change of -5.24% from the previous day.

Similarly, Ethereum price action was volatile, with the highest price recorded at $4,091.28 and the lowest at $3,063.60 within the same period. Ethereum saw a notable price change of -4.75% on April 2, 2024, with the price at $3,336.30.

Dollar Index Gains After ISM Manufacturing Index Rises More Than Expected

February's personal spending report initially supported the dollar index's rise, and comments from Federal Reserve Chair Powell indicated there was no rush to cut interest rates.

Gains were extended by the release of the March ISM Manufacturing Index, which beat expectations and rose +2.5 to 50.3, the highest level in a year and a half. The Prices Paid subindex also rose significantly, hitting a one-and-a-half-year high of 55.8, beating forecasts.

The positive ISM manufacturing index suggests a stronger economic outlook, with manufacturing activity expanding more than expected.

This has implications for interest rate policies, potentially affecting the Federal Reserve's decisions on rate adjustments. The influence of the report was reflected across all currency pairs, with a drop to a one-and-a-half-month low and an increase. Following the PMI data, the strength of the dollar against a basket of major currencies was revealed.

The PMI report contributed to the rise in Treasury yields, signaling investor expectations for tighter monetary policy in response to strong manufacturing data. This movement in bond yields also reflects the market's anticipation of future economic conditions and inflationary pressures.

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please review our website policy before making financial decisions.

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This article was originally published on The Tokenist. Check out The Tokenist's free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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