Unexpected Manufacturing Boom in March Propels US Dollar, Pushes Down Crypto

and saw significant price swings as the rally on robust US manufacturing data.

The cryptocurrency market experienced significant volatility over the past month, with Bitcoin () and Ethereum () showing substantial 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 decline, with Bitcoin dropping over 5% to $66,010 at the time of writing and Ethereum to $3,336, down over 4%.

Meanwhile, the (DXY) rallied to a 4-and-a-half-month high, bolstered by a stronger-than-expected US manufacturing PMI report for March.

Bitcoin and Ethereum See Over 4% Decline

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

Similarly, Ethereum’s price action was volatile, with the highest recorded price at $4,091.28 and the lowest at $3,063.60 within the same period. Ethereum experienced 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 Higher than Expected

The February personal spending report initially supported the dollar index’s rise, and Fed Chair Powell’s comments indicated there was no rush to cut interest rates.

Gains extended with the release of the March ISM manufacturing index, which exceeded expectations, rising +2.5 to 50.3, the highest level in one and a half years. The Prices Paid sub-index also increased significantly, reaching a one-and-a-half-year high of 55.8, surpassing forecasts.

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

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

The PMI report contributed to higher Treasury yields, indicating investors’ expectations for a tighter monetary policy in response to the robust 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 consult our website policy prior to making financial decisions.

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