Bitcoin retreats away from a record high
Bitcoin lost ground again on Monday on profit-taking, moving away from a record high at $100,000.
After hitting successive record highs, the world’s most valuable cryptocurrency is once again attempting to reach its fair price in the market through natural sell-buy interactions.
Now traders await crucial US inflation data later this week to gauge the likely odds of a Federal Reserve interest rate cut next week.
The Price
Bitcoin fell 3.1% at Bitstamp to $98,033, with a session-high at $101,271.
On Sunday, bitcoin rose 1.3%, the third profit in a row, hitting a record high at $101,204.
The world’s most valuable cryptocurrency rallied 4% last week, marking the fifth weekly profit in six weeks as investments continue to flow in.
Bitcoin hit a record high at $103,647 on Thursday after passing through $100,000 for the first time ever.
Crypto Market Value
The market value of cryptocurrencies fell by $105 billion to a total of $3.750 trillion, as both bitcoin and ethereum slipped.
Crypto market value hit a record high on Thursday at $3.825 trillion.
US Yields
US 10-year treasury yields fell 0.35% on Monday, extending losses for the fourth straight session and about to trespass the six-week barrier at 4.126%, in turn boosting non-yielding assets.
The developments come after weak US labor data that showed the tight conditions are finally relaxing.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 85% for December.
US dollar hovers near three-week low on US yields
The US dollar fell in European trade on Monday against a basket of major rivals, resuming losses and approaching three-week lows as US 10-year treasury yields weakened.
The decline comes amid high pricing for the odds of a 0.25% Federal Reserve rate cut next week, with investors now waiting for mainline US inflation data for November, which will shed light on inflationary pressures on the Federal Reserve’s policymakers.
The Index
The dollar index fell 0.1% to 105.84, with a session-high at 106.21.
On Friday, the dollar index rose 0.25% away from a three-week trough at 105.42.
US Yields
US 10-year treasury yields fell 0.35% on Monday, extending losses for the fourth straight session and about to trespass the six-week barrier at 4.126%, in turn boosting non-yielding assets.
The developments come after weak US labor data that showed the tight conditions are finally relaxing.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 85% for December.
Gold gains ground as US yields weaken
Gold prices rose in European trade on Monday, moving higher for a second day as US 10-year treasury yields weakened amid high pricing for the odds of a 0.25% Federal Reserve rate cut next week.
Now investors await mainline US inflation data for November, which will shed light on inflationary pressures on the Federal Reserve’s policymakers.
Gold is also boosted by headlines about China’s central bank buying gold once again in November after a six-month hiatus.
Prices
Gold prices rose 0.7% to $2651 an ounce, with a session-low at $2627.
On Friday, gold rose 0.1% away from a week low at $2613.
Gold prices lost 0.7% last week, the second weekly loss in a row as haven demand declined.
US Yields
US 10-year treasury yields fell 0.35% on Monday, extending losses for the fourth straight session and about to trespass the six-week barrier at 4.126%, in turn boosting non-yielding assets.
The developments come after weak US labor data that showed the tight conditions are finally relaxing.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 85% for December.
Chinese Demand
Media reports indicated that the People’s Bank of China had returned to purchasing gold in November after a six-month hiatus. China is the world’s largest actual buyer of gold.
SPDR
Gold holdings at the SPDR Gold Trust remained unchanged at 871.94 tons, the lowest since November 18.
Euro backs off three-week high on interest rate gap
Euro fell in European trade on Monday on track for the second straight loss against the dollar away from three-week highs on profit-taking, and concerns about the widening interest rate gap between Europe and the US.
The European Central Bank plans to cut interest rates by 25 basis points later this week, as markets await important US inflation data to put a final pricing for the odds of a US interest rate cut next week.
The Price
The EUR/USD fell 0.3% today to $1.0532, with a session-high at $1.0569.
The pair closed down 0.2% on Friday, the first loss in four days, moving away from three-week highs at $1.0629.
Interest Rate Gap
The current US-eurozone interest rate gap stands at 135 basis points in favor of the US, and will likely expand to 160 basis points this week.
European Rates
European Central Bank President Christine Lagarde told the European Parliament in Brussels that the bank’s fight with inflation is approaching its end, but it’s not won yet.
The ECB will likely not comment on the increasing political uncertainty in Europe when it convenes next week.
The odds of an ECB 0.25% interest rate cut in December stood at 90%.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 85% for December.
Now investors await mainline US inflation data for November, which will shed light on inflationary pressures on the Federal Reserve’s policymakers.