Elon Musk’s Love for Dogecoin Is Not Abating

Written by: Edward Moya | OANDA

US stocks are rising again as the reflation trade continues with the yield curve continuing to steepen.  There is no main driver for the markets today.  Treasury yields are not going anywhere, earnings from Merck, Unilever, and Yum are nothing to get excited over, and the retail-driven trading frenzy continues to ease. 


Elon Musk’s Twitter break is over and clearly his love for Dogecoin is not abating.  Musk delivered a wrath of tweets on SpaceX and endorsements for Dogecoin.  Musk took down his Bitcoin bio and tweeted, “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge”.  

Dogecoin surged higher and sparked a broad rally across all the major cryptocurrencies.  Bitcoin initially tumbled after Musk removed Bitcoin from his bio, but still seems poised for another run towards the $40,000 level.   

Apple Car

Apple appears ready to take another stab at making a car.  A partnership between the tech giant and Hyundai-Kia is nearing, but that doesn’t mean another auto maker can’t join the mix.  An Apple-branded autonomous electric vehicle with Hyundai-Kia could go into production in 2024.  

Apple’s automotive efforts started in 2014 and were abandoned in 2016.  Taking on Tesla will be a difficult task and in order to be successful Apple will need to have a better battery design. 


Since the Georgia Senate runoff races that gave President Biden his ‘blue wave’ in January the dollar has been on a tear against the euro.  At the end of last year, net dollar selling was approaching its highest levels in a decade, so an unwind of this trade was needed.  After nearly touching 1.2350 in January, the euro has fallen to below the 1.20 level.  The macroeconomic outlook for the eurozone took a hit on a disappointing vaccine rollout and that downbeat assessment could still trigger some further pain for the euro.  

Eventually the dollar will lose its crown and the unprecedented fiscal and monetary efforts will weigh on the currency.  The EUR/USD currency pair could easily test 1.19 this week, but the bearish slide should exhaust itself on a move towards the 1.17 region.  


The British pound surged after the BOE eased concerns that they were closer to considering negative interest rates.  Hope for the best and prepare for the worst is what the BOE is telling the banks.  Preparing for negative rates was an effective next step.  The Bank is considering a potential tiered system.  The GDP growth forecast was lowered from 7.5% to 5.0%.  

The UK economy is turning a corner and their vaccine rollout success should point to a brighter second half of the year.  


Crude continues to rise on strong momentum from falling stockpiles and COVID vaccine progress.  It’s been quiet on the energy front so far, which is allowing energy traders to focus on the improving supply and demand fundamentals.  

Brent crude has a price barrier at the $60 level, so slowly put a pause in the current rally.  


Gold is dropping as the dollar rebound continues and demand for safe-havens ebb.  Gold is consolidating but if it breaks below $1,800, it could find itself in the danger zone.  The unwinding of bearish dollar bets is almost over, but it could still have one last push. 

The longer-term outlook is still bullish for gold.  A quick passing of President Biden's $1.9 trillion stimulus relief plan should provide some underlying support for gold.

Related: Is a Larger Market Correction Coming?