USD mixed to softer in quiet trade – Scotiabank
Source Fxstreet
The US Dollar (USD) is opening a little softer overall but movement is limited across the major currencies and there is a sense of markets marking time ahead of tomorrow’s US CPI data—and perhaps tonight’s US presidential debate, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
USD drifts in featureless trade as markets await debate, CPI
“The NOK and NZD are leading intraday gains for the currencies while the MXN is a relative underperformer, along with the ZAR. European stocks are mixed and US equity futures are flat. Bonds are not showing much interest in moving either. There are no major data reports today. The Fed’s Barr (on Basel III) and Bowman (stress testing) are speaking but the FOMC blackout is in effect, meaning no comments on the policy outlook.”
“The DXY is consolidating on the short-term charts and is still trying to take fuller advantage of the rebound in price seen at the end of August which signaled a potential recovery. Dollar index option pricing suggests a moderation in bearish sentiment as short-term risk reversal trade around neutral levels.”
“Swaps have priced out some risk of a 50bps cut from the Fed next week but still reflect the small chance that a larger cut could emerge—which is not an unreasonable position, in my view. Look for more range trading in the majors for now. DXY gains above 102 may signal scope for a little more strength. Support for the index sits at 100.5.”
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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