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* Chart: global exchange rates tmsnrt.rs/2RBWI5E
LONDON, June 21 (Reuters) – The dollar held onto gains from previous weeks on Monday after the Fed’s surprise hawkish tilt, as bitcoin fell as China intensified its crackdown on cryptocurrency mining .
The dollar index was broadly stable in the aftermath of a 1.9% jump last week – the highest since March 2020 – as the US Federal Reserve signaled the earlier-than-expected end of its ultra-monetary policy. eased.
The index, which tracks the greenback against six major currencies, edged down to 92.221 after peaking at 92.405 on Friday, a level not seen since April 13.
The Fed’s hawkish stance has since weighed on risk sentiment, including for equity markets, while boosting currencies seen as safe havens, notably the dollar and Japanese yen.
The yen strengthened further on Monday, up a quarter of a percent against the dollar to 109.97 per dollar, while the euro was broadly stable.
The Fed’s hawkish policy change brought a sharp end to the recent period of low volatility and narrow trading ranges for the G10 FX, MUFG currency analysts said in a note.
The Fed has encouraged market participants to factor in more rate hikes next year by raising US short rates and the US dollar.
The Fed’s policy stance has turned a positive wind for the dollar and will be a difficult environment for risky assets, Westpac analysts said.
While the dollar index has the opportunity to test highs reached in March after its recent gains, there is not enough juice for a sustained mid-term breakout beyond that, they added.
Goldman Sachs analysts agreed the dollar gains may not be sustainable, noting that other central banks will also need to consider policy normalization as their economies recover from the pandemic.
In cryptocurrencies, the recent bad bitcoin run continued with an 8% drop below $ 33,000 as China extended mining restrictions to Sichuan Province.
Crypto mining is big business in China, accounting for more than half of the world’s bitcoin production.
Reporting by Iain Withers, additional reporting by Hideyuki Sano in Tokyo, editing by Catherine Evans
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