Dollar consolidates recent gains, Bitcoin fiasco ahead of imminent ETF approval

<p>There's no shortage of drama in markets to start the new year, this time with Bitcoin grabbing all the attention yesterday. For a brief moment, there was jubilation as the SEC tweeted out that Bitcoin ETFs have been approved. But as it turns out, their account was hacked (how crypto is that?) and we have to wait yet another day before it becomes official.</p><ul><li><a href="https://www.forexlive.com/news/sec-grants-approval-for-bitcoin-etfs-20240109/" target="_blank" rel="follow">SEC account hacked to say bitcoin ETFs approved but it wasn't</a></li><li><a href="https://www.forexlive.com/Cryptocurrency/sec-says-bitcoin-etfs-have-not-been-approved-20240109/" target="_blank" rel="follow">SEC says Bitcoin ETFs have NOT been approved</a></li></ul><p>Putting aside the headlines, the price action perhaps was more telling. It took about 10 minutes for the SEC to clear things up and a little after for the news that it was a hack to get across social media, but it was evident that there was a buy the rumour, sell the fact play on the initial headlines:</p><p>So, can we come to expect the same with the official decision which is likely to come later today? There seems to be a good chance of that especially if we do get another quick pop higher again.</p><p>Looking over to traditional markets, things look to be consolidating before we get to the US CPI data on Thursday. As mentioned before, this week is a tale of two halves and it looks like traders are now settling in awaiting the inflation numbers before really committing to anything.</p><p>In the bond market, 10-year Treasury yields rose slightly before coming back down yesterday but still holding above 4% for now. Yields are at 4.02% currently but still holding below its 200-day moving average, seen at 4.046%.</p><p>In the equities space, the Monday rally was kept in check in trading yesterday. The S&amp;P 500 fell 0.1% and Dow 0.4%, although the Nasdaq ended the day up 0.1%. Still, risk appetite seems sapped for now and we might have to wait on the US CPI data tomorrow before having a better sense of things.</p><p>In FX, the dollar continues to hold steadier across the board. USD/JPY is up slightly by 0.2% to 144.80 levels and looking to retest the 145.00 mark but the rest of the major currencies seem more muted on the day. The changes are light but after last week's advance, the dollar is still sitting in a decent spot to take advantage of any softer inflation numbers that may come this week.</p>

This article was written by Justin Low at www.forexlive.com.