Euro hits 2024 lows as Europe's economy faces risks
Euro fell in European trade on Wednesday against the US dollar, plumbing 2024 lows and trading below $1.06 for the first time in a year as risks besieging the European economy mount.
Germany is facing political turmoil, while the whole EU faces likely trade tensions with the US as Donald Trump prepares to take the reigns.
The Price
The EUR/USD pair fell 0.3% today to $1.0593, the lowest since November 2023.
The euro fell 0.25% on Tuesday, the third loss in a row.
German Turbulence
German Chancellor Olaf Shultz said he’s ready for a vote on no-confidence before Christmas, which paves the way for early elections after his governing coalition collapsed.
The Greens Party, which was part of the governing coalition, joined the opposition in calling for early elections, expected in February 2025.
Trade Tensions
The Euro is under pressure from US President-elect Donald Trump's vows to impose tariffs on European goods imports, in accordance with his "America First" policy.
This policy of tariffs will no doubt raise pressures on trans-Atlantic relations and could lead to more damaging confrontations.
The euro already lost over 3% of its value against the dollar since Trump’s landslide election victory, on trading for losing trading above $1.06.
European Rates
Recent inflation showed consumer prices in the eurozone rose more than expected in October.
Following the data, the odds of an ECB 0.25% interest rate cut in December plunged from 85% to 50%.
US Rates
Recent remarks by several Fed officials this week were more bullish than expected, thus cutting the odds of a 0.25% December rate cut from 68.5% to 60% according to the Fedwatch tool.
Now investors await US consumer prices data later today for October to get better clues on the path ahead for US policies.
Yen extends losses to four-month trough before US inflation data
Yen fell in Asian trade on Wednesday on track for the third straight loss against the US dollar, plumbing four-month lows as the odds of a Japanese interest rate hike in December faded.
Conversely, the odds of a Federal Reserve rate cut next month also fell after remarks from some Fed officials, with traders now waiting for important US inflation data later today.
The Price
The USD/JPY rose 0.25% today to 154.95, the highest since July 30, with a session-low at 154.50.
The yen lost 0.6% yesterday against the dollar as US long-term treasury yields rallied.
Japanese Rates
The Bank of Japan's latest meeting minutes showed that some members are concerned about uncertainty following the US elections.
At the October 30-31 meeting, the BOJ maintained interest rates unchanged but said that risks from the US economy have shrunk, showing that the conditions are ripe for another rate hike.
However, the doves at the BOJ advised a slower pace in normalizing monetary policies.
US Rates
Recent remarks by several Fed officials this week were more bullish than expected, thus cutting the odds of a 0.25% December rate cut from 68.5% to 60% according to the Fedwatch tool.
Now investors await US consumer prices data later today for October to get better clues on the path ahead for US policies.
Wall Street edges down but still hovers near record highs
Most US stock indices fell mildly on Tuesday but still hovered near recent record highs as investors await remarks by several Fed officials.
US stock indices closed at record highs yesterday, with S&P 500 edging above 6000 points for the first time ever.
The gains came amid a wave of optimism about Donald Trump’s upcoming presidency and his stance on supporting growth through tax and regulation cuts.
On trading, Dow Jones fell 0.2% as of 15:27 GMT, or 114 points to 44,180 points, while S&P 500 edged down 0.1%, or 3 points to 5998 points, as NASDAQ rose 0.1%, or 14 points to 19,312 points.
Bitcoin gives up record highs on profit-taking
Bitcoin fell in American trade on Tuesday for the first time in eight sessions, giving up recent record highs amid active profit-taking.
The world's most valuable cryptocurrency is expected to gather fresh momentum before an anticipated breach of the coveted $90,000 barrier.
Prices
Bitcoin fell 4% at Bitstamp today to $85,121, after hitting a record high at $89,983.
On Monday, bitcoin spiked 10%, the seventh profit in a row, and the largest since August 8 amid a massive cash inflow into crypto assets.
Crypto Market Value
The market value of cryptocurrencies fell by $60 billion today to a total of $3.024 trillion on profit-taking.
Crypto market value surged to a record high earlier today at $3.156 trillion.
The $90,000 Barrier
Bitcoin failed the first pass at piercing the $90,000 record barrier due to active profit-taking after a huge wave of gains.
Positive Outlook
Citibank analysts expect bitcoin to reach $100,000 following Trump’s victory, due to the upcoming administration’s friendly attitude towards cryptocurrencies and their regulations.