2024-03-25 03:51

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies firmed on Monday, recovering a measure of recent losses as the dollar consolidated at one-month highs, while traders remained on guard over potential government intervention for the Chinese yuan and Japanese yen. Most regional currencies were nursing steep losses from last week, as the dollar blazed past seemingly dovish signals from the Federal Reserve following a surprise rate cut from the Swiss National Bank. Strength in the dollar limited gains in most Asian currencies on Monday. USDCNY falls below 7.2, state banks seen intervening The Chinese yuan strengthened sharply, with the USDCNY pair falling 0.4% and briefly breaking below the 7.2 level. The offshore yuan's USDCNH pair fell 0.5% but remained well above the 7.2 level. Reuters reported that the People’s Bank of China had instructed state-owned banks to buy yuan and sell dollars in the open market, to support the Chinese currency. The yuan tumbled to four-month lows in recent sessions amid growing concerns over a sluggish Chinese economy. The PBOC also recently signaled that it still had enough headroom to further reduce its benchmark rates. USDJPY strengthens after verbal warning The Japanese yen saw some strength on Monday, with the USDJPY pair falling 0.1% after a top Japanese currency diplomat offered a verbal warning on potential intervention by the government. Masato Kanda, vice finance minister for international affairs, said that recent weakness in the yen did not reflect the currency’s fundamentals, and that the government remained ready to respond to the yen’s slide. The USDJPY level surged to four-month highs last week even as the Bank of Japan raised interest rates for the first time in 17 years. But BOJ Governor Kazuo Ueda offered largely dovish signals for monetary policy in the near-term, which were a key weight on the yen. With the USDJPY pair now trading well above the 150 level, traders were on edge over any potential intervention in currency markets, given that such USDJPY levels have attracted intervention in the past. Inflation data for Tokyo is also due later this week. Dollar steadies below 1-mth high The dollar index and dollar index futures fell slightly from a one-month high in Asian trade, consolidating after a late-week rally. The greenback had shot up after dovish signals from the SNB and Bank of England suggested that the dollar will remain the only relatively high-yielding, low-risk currency in the near-term. While the Fed still flagged at least 75 basis points of rate cuts this year, that figure will depend largely on the path of inflation. PCE price index data- the Fed’s preferred inflation gauge, is due this Friday. Broader Asian currencies firmed, but gains were limited in anticipation of key economic figures this week. The Australian dollar firmed, with the AUDUSD pair rising 0.2% ahead of a monthly inflation reading due later in the week. The South Korean won’s USDKRW pair rose 0.3%, while the Singapore dollar’s USDSGD pair firmed 0.1% ahead of inflation data due later in the day. https://www.investing.com/news/forex-news/asia-fx-rises-with-yen-yuan-on-intervention-watch-dollar-consolidates-3350786

2024-03-25 03:10

Copyrighted Image by: Reuters Investing.com-- The Chinese yuan strengthened sharply on Monday, with the USDCNY pair falling below the key 7.2 level after reports said that Chinese state-owned banks were intervening in currency markets. The USDCNY pair fell 0.4% to 7.1978 yuan, after surging to a four-month high of over 7.2 on Friday. Monday’s drop also came following a substantially stronger-than-expected midpoint fix from the People’s Bank of China. The offshore yuan, however, remained well above the 7.2 level. The USDCNH pair fell 0.5% on Monday to 7.2371. The PBOC was seen instructing Chinese state-owned banks to buy yuan and sell dollars in the open market, reports from Reuters showed on Monday. The PBOC had also reportedly intervened in currency markets last week to stem a spike in the USDCNY pair, given that Beijing has consistently signaled discomfort with weakness in the yuan. The yuan was hit with a wave of selling in recent sessions as the outlook for China’s economy remained bleak, while a spike in the dollar- to one-month highs- also weighed on the currency. The PBOC recently signaled that it could cut some of its benchmark interest rates further to support the Chinese economy- a move that while unlocking more liquidity for local businesses, presents more downside risks for the yuan. The 7.2 level is psychologically important for the yuan given that previous, sustained breaches of that level have heralded even more weakness in the Chinese currency. The USDCNY pair had surged to 17-year highs in mid-to-late 2023, rising to as much as 7.3. https://www.investing.com/news/forex-news/chinese-yuan-usdcny-falls-below-72-amid-reports-of-pboc-intervention-3350784

2024-03-25 01:32

Copyrighted Image by: Reuters. Investing.com-- Oil prices settled higher Monday, driven by growing bets on tighter global crude supplies as Russia is reportedly set to cut oil output at a time when Ukraine continues to target the country's refineries. At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures rose 1.64% to $81.95 a barrel, while Brent oil futures rose 1.6% to $86.57 a barrel. Russia orders output curbs to meet OPEC+ quota Russia ordered companies to cut output to meet its agreed OPEC+ output quota, Reuters reported, citing sources. The news come amid ongoing Ukrainian strikes on refineries in Russia thqat has "added pressure on fuel markets, leading to rising demand for available crude oil cargoes," ANZ Research said. "Adding to the issue was the news that Indian refineries are refusing to take Russian crude carried on PJSC Sovcomflot tankers due to US sanctions," it added. Gaza temporary ceasefire unlikely despite after UN vote The United Nations Security Council voted on a measure Monday calling for a immediate temporary ceasefire in the Gaza strip for Ramadan, as well as the release of all hostages by Hamas. The non-binding resolution isn't expected to curb Israeli forces pressing on with their offensive in Gaza A deescalation in the Israel-Hamas conflict is expected to soothe concerns over geopolitical instability in the Middle East- which could potentially disrupt crude supplies from the region. This notion has been a key support of oil prices in recent months. https://www.investing.com/news/commodities-news/oil-prices-rise-as-gaza-ceasefire-hopes-dim-supply-outlook-tightens-3350772

2024-03-22 20:38

Copyrighted Image by: Reuters. Galaxy Digital's Mike Novogratz explains why Bitcoin price will keep going higher In a Friday discussion at the Bitcoin Investor Day in New York, Mike Novogratz, CEO of Galaxy Digital, shared insights on why he thinks Bitcoin is likely to continue trending higher. Highlighting concerns over government spending and borrowing, Novogratz sees Bitcoin as benefiting from the US's fiscal indiscipline. "What's the macro story for bitcoin?" said Novogratz. "It's relatively simple. Our government can't keep its pants on and stop spending money. That went from a problem in the early 2000s to a crisis with Donald Trump and Joe Biden. They go down as the two presidents who destroyed our fiscal stability." With national debt surpassing $34 trillion and the government's spending reaching 25% of GDP, the cryptocurrency, according to Novogratz, stands as a safe haven against potential inflation and debt debasement. This viewpoint aligns with growing investor interest in Bitcoin as a hedge against fiscal uncertainty. Novogratz, a long-time Bitcoin enthusiast since its early days, also noted the spike in government expenditure during the Trump and Biden administrations, emphasizing the normalization of structural deficits. "Until you see a government, both Dems and Republicans, that says 'enough,' bitcoin's going to keep going higher," Novogratz said. Bitcoin fell 3% in the past 24 hours and was sitting just above the $63,500 level at the time of writing. https://www.investing.com/news/cryptocurrency-news/galaxy-digitals-mike-novogratz-explains-why-bitcoin-price-will-keep-going-higher-432SI-3350332

2024-03-22 14:39

Copyrighted Image by: Reuters Bitcoin's price action is currently under the influence of US spot Bitcoin Exchange-Traded Funds (ETFs) and the highly-anticipated rewards-halving event. Elitsa Taskova, Chief Product Officer at Nexo, highlighted two contrasting scenarios post-halving. In an optimistic outlook, if miners can leverage their holdings without direct selling, Bitcoin's price could soar to $100,000 in 2024, echoing a widespread sentiment among asset managers and industry pundits. On the flip side, a less favorable condition could see Bitcoin retesting support levels around $40,000, particularly if mining facilities are forced to liquidate assets for operational funding. The introduction of ETFs has been a pivotal factor, propelling Bitcoin to unprecedented heights and marking several all-time peaks in a short span. However, as the ETF frenzy slightly dims, the crypto community's focus shifts towards the halving event, which is expected to be a critical determinant of Bitcoin's future price trajectory. That said, this upcoming halving is particularly unique due to it being the first to follow an ETF-led rally in Bitcoin's history. Typically, the effects of reduced mining rewards on Bitcoin's price are observed roughly six months post-halving. Yet, with this new backdrop of prior ETF-induced growth, predictions are more speculative, navigating through uncharted territories. Overall, the halving event is expected to bring about major shifts within the Bitcoin mining industry. The future direction of Bitcoin's value could either establish a new price equilibrium, supporting miners amidst their hefty energy costs, or it might trigger a sell-off to maintain operational liquidity. Additionally, the substantial purchasing influence of ETFs is expected to surpass the usual effect of supply constriction typically associated with halvings. As we approach a point in the market cycle where the supply dynamics are increasingly affected by the actions of long-term holders, their choices to either sell or hold become critical in influencing market liquidity and sentiment. Achieving a record peak before the halving also introduces a novel situation, yet the cycle's evolution resembles previous patterns when aligned with the April 2021 highs. https://www.investing.com/news/cryptocurrency-news/crypto-expert-shares-2-potential-outcomes-for-bitcoin-price-after-halving-3349974

2024-03-22 10:22

Copyrighted Image by: Reuters Investing.com - The U.S. dollar rose sharply in European trade Friday, after the surprise cut by the Swiss National Bank cast the Federal Reserve in a more hawkish light. At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.4% higher at 104.085, near a three-week high and on track for a second week of gains. U.S. economy on solid footing The Swiss National Bank delivered the biggest surprise of a week filled with central bank meetings, cutting interest rates and citing the strength of the franc as a reason. The Swiss franc, the best performing G10 currency of 2023, dropped more than 1% overnight, and has continued to fall Friday, with USD/CHF up 0.4% to 0.9009, rising closer to parity. This move has prompted traders to reassess the Fed's likely future actions, in the wake of this week’s FOMC meeting where officials reaffirmed the likelihood of three interest rate cuts this year if the economic data allows. The U.S. central bank also sharply upgraded its outlook for growth in 2024, and Thursday’s data suggested the U.S. economy remained on solid footing after the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February. This suggests the Fed doesn't need to be in any hurry to cut rates going forward. That said, “the jump in the dollar appears overdone,” said analysts at ING, in a note. “The Federal Reserve sent a rather clear message earlier this week: some resilience in activity data won’t be a barrier to cutting as long as inflation shows downward momentum.” BOE rate cut expectations not “unreasonable” In Europe, GBP/USD fell 0.5% to 1.2588, falling to a one-month low after the Bank of England left interest rates unchanged on Thursday, but two MPC members dropped their calls for a rate hike in the face of easing inflation. Expectations of interest rate cuts this year were not "unreasonable", according to Bank of England Governor Andrew Bailey, the Financial Times reported on Friday. “Markets are largely reading this as an acknowledgement that cuts aren’t too far away,” ING added, and now increasingly convinced the BoE will start easing in June (20bp priced in), along with starting to speculate on a May move (7bp priced in).” EUR/USD traded 0.4% lower to 1.0814, with eurozone activity data continuing to paint a grim picture for the region’s manufacturing outlook. The European Central Bank may be in a position to cut interest rates before the summer recess, possibly in June, as inflation is on its ways back to the bank's 2% target, Bundesbank President Joachim Nagel said on Friday. The comments add Nagel to a long list of policymakers seemingly backing a cut in June and suggest the ECB will be the second major central bank after its Swiss counterpart to start unwinding a record string of rate hikes. Yen close to four-month low USD/JPY traded marginally lower at 151.59, close to its highest level in four months, with the yen nursing steep overnight losses. USD/CNY rose 0.2% to 7.2297, crossing the 7.2 level for the first time since November 2023, following reports that the PBOC was selling dollars and buying yuan from the open market to support the Chinese currency. AUD/USD dropped 0.8% to 0.6515, with risk sentiment taking a hit. https://www.investing.com/news/forex-news/dollar-soars-with-us-economy-on-solid-ground-sterling-slumps-3349439