Bitcoin continues to gain value on Friday with the BTC/USD pair reaching its record high a couple of minutes ago at $4850, where it was gaining more than $100, or 2.5%, on a daily basis.

 Since the start of the week, bitcoin increased more than $200 in value while the took nearly 50% market share of all cryptocurrencies according to the latest available data on coinmarketcap.com. Commenting on this week’s record setting rally, “bitcoin’s growth and most recent spike, have been attributed in part to many Wall Street investors starting to explore the digital currency after it overcame its scaling civil war on Aug. 1,” said Darryn Pollock, an author at cointelegraph.com.

 

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Major equity indexes in the U.S. closed the first trading day of September with gains as today’s data strengthened the expectations of the Fed refraining from making another rate hike before the end of the year.

Nonfarm payrolls in the U.S. increased by 156K on a monthly basis in August and the July data got revised down to 189K from 209K while the unemployment rate rose to 4.4% from 4.3%. The CME Group FedWatch Tool’s probability for a December rate hike moved lower to 36% after breaking below the 40% mark yesterday amid softer-than-expected PCE price index data from the U.S.

Commenting on the data, “the employment report was a little disappointing but not wildly different than what we’ve historically seen. There’s really nothing in the report that I think dissuades the market from a bullish bias,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, told Reuters.

The Dow Jones Industrial Average added 40 points, or 0.18%, to close at 21,987.56 after peaking above the 22K threshold during the session. The S&P 500 rose 4.25 points, or 0.17%, to 2,474.25 and the Nasdaq Composite gained 5.02 points, or 0.08%, to 6,433.68.

Headlines from the U.S. session:

Dollar Index rebounds from 2-year lows and ends week higher
WTI unresponsive to oil rig count data, remains above $47
US Construction Spending falls in July – Wells Fargo
Atlanta Fed: GDPNow model forecast for real GDP growth in Q3 eases to 3.2%
US ISM: August can be a head-fake – Wells Fargo
NY Fed: GDP Nowcast stands at 2.2% for Q3 of 2017
US August NFP consistent with economic growth – Wells Fargo
US: Total nonfarm payroll employment increased by 156,000 in August
US: Manufacturing output expands at weakest pace since June 2016 – Markit
US: Economic activity in the manufacturing sector expanded in August – ISM
US: Construction spending in July 2017 estimated at seasonally adjusted annual rate of $1,211.5 billion
US: Index of Consumer Sentiment eased to 96.8 in August – UoM

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The Dollar Index is about to end the week higher, after a recovery of the greenback against European currencies and the yen. The index bottomed on Tuesday at 91.54, the lowest since January 2015 and then rebounded.

On Friday, the index dropped sharply after the release of the US employment report, falling to 92.03. It reversed quickly and rose back above 92.50. 

According to the report, non-farm employment rose 156K in August, below the 180K expected while average hourly earning increased 0.1%, under 0.2% of market consensus. The data pushed the greenback sharply lower. 

US August NFP consistent with economic growth – Wells Fargo

Afterward manufacturing data showed that the sector continued to expand in August. The ISM surprised to the upside, it came in at 58.8, the highest since 2011 and fueled the rebound of the greenback. 

Take the ISM with a Grain of Salt

The DXY peaked at 92.88 and the pulled back. During the last hours, it has been hovering around 92.75, up 0.32% from the level it had a week ago. 

Outlook 

The Dollar Index is rebounding from multi-year lows and after a spike lower, but the bounce so far does not look strong enough. If it rises back above 93.50, the greenback could gain support for a more significant correction. Despite the recent recovery, the daily chart still shows the index under pressure. 

Risks continue to be tilted to the downside. Next week, in terms of data, is quiet in the US with the main reports being Factory Orders on Tuesday and ISM non-manufacturing on Wednesday. The European Central Bank meeting on Thursday is the main risk event. The euro has a 54% weighting in the DXY. 

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