Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.
Tuesday's U.S. manufacturing data is likely to show continued contraction, signaling weakness in the dollar index and strength in bitcoin., the leading cryptocurrency by market value, fell over 10% in the seven days to Sept. 1, reversing the preceding week's price bounce as the decline in the dollar index stalled.
A weak reading will strengthen the case for the Federal Reserve to cut interest rates, sending the dollar lower and boosting demand for riskier assets. Interest-rate markets are already pricing a 70% chance of a 25 basis point cut and a 30% chance of a 50 basis point cut in September, according to CME's FedWatch tool.
That said, July's weaker-than-expected ISM PMI, released Aug. 1, triggered recession fears, weighing on risk assets even as the dollar dropped. BTC fell 3.7% to $62,300 that day. Traders, therefore, should watch out for a"growth scare" should the PMI come in worse than expected.
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