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Dollar rises as a case to raise US interest rates By Reuters

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© Reuters. FILE PHOTO: US dollar banknotes are shown in this illustration taken on July 17, 2022. REUTERS/Dado Rovich/Illustration

Written by Tom Westbrook

SYDNEY (Reuters) – The dollar started the week strong on Monday as a strong US labor market boosted bets on higher interest rates as traders braced for data expected to show higher inflation.

US unemployment figures showed an unexpected drop last month, and inflation data due for release on Thursday is expected to show headline inflation of 8.1% on an annual basis. Policy makers’ preferred core inflation rate is expected to rise to 6.5%.

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Sean Callow, a strategist at Westpac, said the data and higher yields were a “strong combination for the dollar.”

“This is further evidence that the US economy is not collapsing,” he said. “It just feeds into the idea that the Fed is going to spend the next three weeks saying the same about interest rates.”

Higher oil prices and geopolitical tension also provided plenty of reasons for nervousness about growth, affecting the currencies of energy importers in Europe and even exporters such as the growth-sensitive Australian dollar.

It fell 0.3% to a two-and-a-half year low of $0.6347 in early trade in Asia weakened by a holiday in Japan. Sterling fell 0.2 percent to $1.1071, while the yen was drifting into an area on the weaker side of 145 per dollar, which prompted the authorities to step in to support it last month.

The yen last recorded 145.37 yen to the dollar. The New Zealand dollar touched a two-week low of $0.5593.

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Futures pricing indicates that traders see a roughly 90% chance of a 75 basis point rate hike in the US next month and more than 150 basis point rate tightening by May. Ten-year Treasury yields rose for the 10th consecutive week last week. [US/]

Benchmark futures jumped more than 11% last week after the Saudi-led production cartel agreed to cut supplies, while the intensifying war in Ukraine also poses a threat to Europe’s energy security as winter approaches.

The euro fell below $0.98 on Friday and was last seen at $0.9733. The level was stable at 112.83, off lows around 110 last week and crept back towards a 20-year high last month at 114.78.

Markets were waiting to see how the Kremlin might respond to the explosion that hit Russia’s only bridge to Crimea. Nuclear-armed North Korea conducted its seventh missile test recently over the weekend.

Chinese markets reopened after a week-long holiday, before which they settled at 7.1310 per dollar. The Communist Party’s 20th National Congress opened on Sunday, and is expected to reaffirm Xi Jinping’s leadership.

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Service activity in China contracted for the first time since May in September, disappointing expectations.

“The yuan is likely to trade between 7.0 and 7.2 in the near term,” said Scotiabank strategist Qi Gao.

================================================== == ======

Currency purchase prices at 2304 GMT

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

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Previous change

session

Euro/Dollar

0.9733 USD 0.9732 -0.02% -14.41% +0.9739 +0.9728

dollar / yen

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145.3800 145.2700 + 0.12% + 0.00% + 145.4150 +145.4400

euro / yen

141.50 141.62 -0.08% + 0.00% +141.5700 +141.4700

dollar / swiss

0.9948 0.9949 + 0.01% + 9.08% + 0.9949 +0.9950

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Pound sterling / dollar

1.1073 1.1093 -0.19% -18.13% +1.1095 +1.1065

Canadian Dollar

1.3742 1.3739 + 0.02% + 8.69% +1.3754 +1.3725

Australian dollar / dollar

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0.6352 0.6366 -0.22% -12.62% + 0.6375 + 0.6343

NZ

$ / $ 0.5597 0.5594 + 0.06% -18.23% + 0.5606 +0.5593

all spots

locations in Tokyo

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spots in europe

twists

Tokyo forex market information from the Bank of Japan

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.