Bitcoin rallies 6% amid positive crypto sentiment
- Ripple snags court victory over SEC
- Cash influx rises into bitcoin exchange funds
Bitcoin rallied 6% on Thursday, resuming its recovery from six-month lows amid a positive sentiment in the crypto market.
The Ripple company snagged a court victory over the US SEC, which boosted infusions into bitcoin exchange funds.
Prices
Bitcoin rose 6% at Bitstamp today to $58,482, with a session-low at $54,748.
On Wednesday, bitcoin lost 1.65%, after a 3.8% surge in the previous session away from six-month lows at $49,577.
Crypto Market Value
The market value of cryptocurrencies rose by over $100 billion to a total of $2.130 trillion, as bitcoin, ethereum and ripple gained ground.
Court Victory
A federal court in the US decided that Ripple should pay a civil fine of $125 million, much less than the $2 billion imposed by the U.S. Securities and Exchange Commission
The SEC sued Ripple in 2020, accusing the company of collecting money by selling the currency XPR without registering it as a security, with the currency’s value surging by 25% after the court decision.
Infusions Surge
Cash infusions into Bitcoin Exchange Traded Funds reached $45.1 million on August 6, compared to outside flows of $30.6 billion.
Dollar moves in a negative zone ahead of unemployment claims data
- US yields drop pressures the currency
- Markets await more data about US rate cuts
The dollar fell in European trade on Thursday, resuming losses and approaching seven-month lows once more under pressure from the declining US treasury yields.
The decline comes ahead of US unemployment claims data, which could provide fresh clues about the US labor sector, and the size of upcoming rate cuts by the Federal Reserve.
The Index
The dollar index fell 0.25% today to 102.92, with a session-high at 103.19.
The index closed up 0.25% on Wednesday, the second profit in a row away from seven-month lows at 102.16.
US Yields
US 10-year treasury yields fell 1.35% today, resuming losses and approaching 14-month lows at 3.667%.
The developments came after a string of bearish remarks by Fed officials which boosted the odds of multiple rate cuts this year.
San Francisco Fed President Mary Dale said she’s keeping her mind open on cutting interest rates as needed.
US Rates
According to the Fedwatch tool, the odds of a 0.5% Fed interest rate cut in September stand at 72.5%.
Unemployment Claims
Investors await US unemployment claims data, which will offer important clues about the state of the labor sector.
US unemployment claims are expected down slightly to 241 thousand last week from 249 thousand in the previous reading.
Euro resumes gains amid interest rate speculation
- Euro about to trade above $1.1 once more
- Hopes increasing of reduced interest rate gap between eurozone and US
The euro rose in European trade against a basket of major rivals, resuming gains after a two-day hiatus and about to touch seven-month highs and trade once again above $1.1, as investors expect the eurozone-US interest rate gap to shrink next month.
Hot inflation data in Europe boosted the odds of an ECB interest rate cut in September, while weak US labor data raised the probability of a 0.5% rate cut by the Federal Reserve.
The Price
The EUR/USD pair rose 0.2% today to $1.0945, with a session-low at $1.0918.
The pair lost 0.1% on Wednesday, the second loss in a row on profit-taking away from seven-month high at $1.1008.
European Inflation
European consumer prices data released last week beat expectations for July and showcased the mounting inflationary pressures on the ECB.
The data, combined with bearish remarks by ECB officials reduced the odds of an interest rate cut in the summer.
European Rates
As European prices accelerated unexpectedly in July, the odds of an ECB interest rate cut in September dived to below 50% as investors await more growth and inflation data from the eurozone.
US Rates
Following the US payrolls report on Washington, which showed signs of a potential recession, the odds of a 0.5% interest rate cut by the Federal Reserve surged from 10% to 70%.
Rate Gap
The current eurozone-US interest rate gap stands at 125 basis points in favor of the US, and might very well shrink to 75 basis points in September.
Yen resumes gains under supervision of Japanese authorities
- Japan’s finance minister supports policy normalization
- Odds of additional BOJ rate hikes fade
The yen rose in Asian trade against a basket of major rivals, resuming gains against the dollar after a two-day hiatus and approaching seven-month high once more under strict supervision by Japanese authorities.
Japan’s finance minister has expressed his support for policy normalization, however, a few bearish remarks from Bank of Japan officials hurt the odds of another interest rate hike this year.
The Price
The USD/JPY pair fell 0.85% today to 145.42, with a session-high at 146.87.
The pair closed down 1.65% on Wednesday on aggressive profit-taking after hitting a seven-month high at 141.68 yen per dollar.
Japanese Authorities
Japan’s finance minister Shinuchi Suzuki said on Thursday that authorities continue to monitor the sharp movements in the stock and forex markets closely, adding that the government supports normalization efforts.
Suzuki said the government is also monitoring wages growth, and that agreed upon wage hikes in the spring are reflected now in the data, with the current policies aiming at achieving sustainable growth in wages.
Less Bullish Remarks
Bank of Japan Deputy Governor Shinichi Uchida said the central bank won’t raise interest rates when the markets are unstable.
He said that given the current turmoil, the BOJ will prefer to maintain current levels of monetary easing unchanged.
Japanese Rates
Naturally, following the remarks, the odds of a BOJ interest rate hike for the third time this year tumbled considerably, which would likely reduce the pressure to unwind carry trades.