Dollar takes a breather ahead of Fed as bitcoin rebounds
Forex markets remained relatively steady on Wednesday as the U.S. dollar paused its recent climb ahead of next week’s Federal Reserve deliberations. Traders are already positioning for the potential path of U.S. rate cuts stretching into 2026, keeping overall sentiment cautious but stable. With major catalysts still a few days away, currency moves stayed narrow, and investors focused on upcoming economic signals that could shape the Fed’s tone.
At the same time, a mild risk-on mood resurfaced across broader markets. Bitcoin continued its strong rebound, boosting confidence in digital assets after recent volatility. The euro also firmed, supported by slightly stronger-than-expected euro-area inflation data, which helped temper concerns about slowing regional momentum. Together, these developments added a modest lift to market appetite while traders awaited clearer policy direction.
Dollar takes a breather ahead of Fed
Bitcoin
Up about 2% to a two-week high around $93,633.70, building on a 6% jump the prior session.Reuters+2Reuters+2
EUR/USD
Up ~0.12% near $1.1640 after clearing its 50-day moving average.
USD/JPY
Steady around 155.70 as markets weigh BOJ hike odds.
AUD
Softer after a GDP miss.
These moves reflect a lull in the greenback as markets price a softer U.S. policy path into 2026.
Drivers today
Why the dollar takes a breather ahead of Fed decisions
Positioning for eventual U.S. easing into 2026 plus a tentative risk rebound kept the dollar contained. Meanwhile, euro-area inflation printed just above expectations, lending mild support to the euro. In Asia, focus stayed on the BOJ, where hike speculation anchored the yen around 155–156 per dollar.
Crypto tone improves
After a rough November and a soft start to December, bitcoin’s push back above $93k improved risk sentiment. Technicians flagged $80,537 as key support; holding above it opens room toward $95k–$100k, according to IG’s Tony Sycamore.
Levels to watch
BTC/USD
Support $80,500–$84,000; resistance $95,000–$100,000.
EUR/USD
Initial support $1.1550; resistance $1.1700–$1.1750 near recent MAs.
USD/JPY
155–156 pivot; BOJ guidance remains the swing factor.
Context & Analysis
Markets are balancing two narratives: a Fed likely on hold next week but biased to ease in 2026, and a BOJ that may tighten, supporting the yen. Slightly hotter euro-area inflation keeps the ECB steady while limiting euro downside. Crypto’s rebound eases broader risk aversion, but November’s drawdown shows sentiment can flip quickly.
Conclusion
With the dollar pausing ahead of key Federal Reserve signals, the near-term market direction will depend heavily on the upcoming FOMC statement. Any hint of a dovish tone could reinforce the current bout of dollar softness and provide further support to risk assets, as investors look for clarity on the pace and timing of future policy adjustments.
At the same time, attention is turning to the Bank of Japan, whose guidance may shape volatility in yen pairs. A firmer or more hawkish BOJ stance would inject fresh two-way movement into USD/JPY, keeping traders alert for sharper swings in the days ahead.
FAQs
Q : Why is the dollar steady today?
A : Positioning for eventual U.S. rate cuts and an improved risk tone kept the greenback range-bound.
Q : What pushed bitcoin higher?
A : A technical rebound after recent sharp losses and better risk appetite lifted BTC toward a two-week high.
Q : Where is EUR/USD trading?
A : Around $1.1640 after euro-area inflation came in slightly above expectations.
Q : What’s happening with USD/JPY?
A : It remains steady near 155.70 as markets assess the possibility of a BOJ rate hike.
Q : Is the rally sustainable?
A : Sustainability depends on next week’s Fed message and upcoming data; two-way volatility is likely.
Q : Does the article’s keyword apply to broader markets?
A : Yes, when the dollar takes a breather ahead of the Fed, risk assets often stabilize, though results can vary.
Facts
Event
Dollar steady ahead of Fed; bitcoin rebounds; euro firmsDate/Time
2025-12-03T11:09:00+05:00Entities
U.S. Federal Reserve (Fed); European Central Bank (ECB); Bank of Japan (BOJ); Bitcoin (BTC)Figures
BTC two-week high ~$93,633.70; EUR/USD ~$1.1640; USD/JPY ~155.70Quotes
“We look for another leg higher towards the $95,000 to $100,000 range…” Tony Sycamore, IG (on bitcoin)Sources
Reuters market wrap; Reuters ECB commentary; Reuters global markets; Yahoo Finance BTC data. Yahoo Finance+3Reuters+3Reuters+3