Dollar Dips as Cryptos Surge Amid Trump-Related Speculations

The dollar's value receded ahead of Federal Reserve Chair Jerome Powell's comments. Cryptocurrencies surged as an alleged assassination attempt on former President Donald Trump boosted re-election speculations. Investors reacted by adjusting odds of a Trump victory, leading to market volatility. Key comments from Fed officials anticipated this week.

The dollar retreated from earlier highs on Monday ahead of comments from Federal Reserve Chair Jerome Powell. Cryptocurrencies surged on bets that an assassination attempt on former President Donald Trump has boosted his re-election chances. Following the incident, investors narrowed the odds of a Trump victory, with online betting site PredictIt showing bets at 67 cents for Trump, up from Friday's 60 cents, while Joe Biden's stood at 27 cents.

Historically, the dollar tends to strengthen under a Trump presidency, a phenomenon known as the "Trump trade," characterized by hawkish trade policies and looser regulation. Trump has positioned himself as a supporter of cryptocurrency, though specifics of his policy remain undisclosed.

Initial market reactions were short-lived, with the dollar falling from its earlier highs. "We're just seeing a calming down of the initial reaction," said Erik Bregar, Director of FX & Precious Metals Risk Management at Silver Gold Bull, Toronto. Market focus is now shifting to Powell's upcoming discussion with the Economic Club of Washington, slated for 12:30 p.m. local time (1630 GMT).

(With inputs from agencies.)