USD Buoyed by Strong U.S. Data, BTC near Record 52,640

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LONDON, Feb 18 Reuters The dollar traded shy of recent highs on Thursday after its first backtoback gains in two weeks as upbeat data bolstered expectations that the U.S. economy would recover from the coronavirus pandemic faster than most of its peers.

Bitcoin traded close to the new record high of 52,640 reached overnight, with its roughly 58 surge this month prompting some analysts to warn that the rally might be unsustainable.

Government stimulus cheques helped U.S. retail sales rebound sharply in January, while industrial output and producer prices data also provided robust upside surprises.

Investors expect a further boost from Joe Bidens proposed 1.9 trillion COVID19 relief package, with the president meeting top labour leaders on Wednesday to drum up support for the plan.

Meanwhile, minutes from the Federal Reserves policy meeting last month reinforced the central banks willingness to let the economy run hot while keeping monetary settings ultraaccommodative.

As we have seen over recent weeks, the dollar has become increasingly cyclical as there is now a link to the pricing of Fed and expected tapering and probably too, that with volatility indices generally low we also have more room to focus on smaller relative differences and crossasset correlations have come down, said Mikael Milhøj, senior analyst at Danske Bank.

Either way, retail sales was a good event study to underpin our view of US outperformance in H2 can support dollar. This is unlike last…

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