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Sterling skids to six-month trough after grim data
Sterling tumbled in European trade on Friday to a six-month low against the dollar, deepening losses for the third day after grim UK data.
The data showed a remarkable slowdown in growth in the final quarter of the year, thus raising the pressure on the Bank of England policymakers, and boosting the odds of a 0.25% interest rate cut in December.
The Price
The GBP/USD pair fell over 0.3% today to $1.2552, the lowest since May, with a session-low at $1.2594.
The pound closed down 0.5% on Thursday following bullish remarks from Federal Reserve officials, while Trump trade momentum renewed.
Grim Data
UK retail sales fell 0.7% m/m in October, compared to September's 0.1% rise, while analysts expected a drop of 0.3%.
Retail sales constitute nearly 70% of the total UK GDP, thus it's highly indicative of the country's economic performance.
UK Rates
Following the data, the odds of a BOE 0.25% rate cut in December jumped from 25% to 40%.
Now markets await more clues, especially data on the UK labor sector and inflation, to determine the path ahead for interest rates.
UK retail sales miss expectations in October
UK retail sales fell 0.7% m/m in October, compared to September's 0.1% rise, while analysts expected a drop of 0.3%.
Retail sales constitute nearly 70% of the total UK GDP, thus it's highly indicative of the country's economic performance.
Bitcoin breaches $99,000 for first time ever.. Why are investors rushing into it?
Bitcoin rallied on Friday and expanded the gains for the fifth straight session, hitting a record high above $99,000 and coming within a striking distance of the coveted $100,000.
The gains come amid a huge investor rush into crypto assets, and in this article we’ll explain some of the factors behind it.
Main Points
World’s most valuable cryptocurrency approaches the historic barrier of $100,000
Bitcoin rises over 45% since Trump’s US election victory
SEC Chief Gary Gensler to step down
Bitcoin-linked stocks experience record surge in trading volumes, amounting to over $50 billion of assets
Three major listed corporations announce plans to use bitcoin as reserve
In November, the bitcoin-gold relationship turned to the inverse
Bitcoin’s market value surged by over two fold this year, marking 130% of total profits since January, and is still on the way for even more record highs.
The $100,000 Historic Barrier
Bitcoin is on the cusp of hitting the coveted $100,00 for the first time ever, buoyed by optimism about Donald Trump’s US election victory.
Bitcoin rose over 45% since Donald Trump’s election landslide on November 5th.
Gary Gensler’s Stepping-down
Investors welcomed news about the SEC Chief Gary Gensler’s stepping down from his post in January, as he was considered an enemy of the crypto industry.
Gensler repeatedly accused the crypto industry of being rife with fraud and malpractice.
Under his rule, the SEC took a harsh stance against crypto companies, on accusation of rule violation and money laundering.
Trump is expected to appoint friendlier people to the posts at the SEC and other regulatory services.
Record Purchases
The MicroStrategy corporation now holds over 3,312,000 bitcoins, valued at over $33 billion, with the company’s stock surging over 500% this year.
This prompted other listed corporations to take similar measures with bitcoin hoarding.
That includes the mining company Marathon Holdings, Cosmos Health, LQR Pharmaceuticals, and others.
Gold and Bitcoin
The original investment thesis on bitcoin was that bitcoin is separate from the stock market and was treated as “digital gold”, similar to how real gold was used as a haven in times of troubles for the stock.
However, the relationship became increasingly inverse between the two, as bitcoin surged alongside stocks and developed a stronger link with it compared to gold, which suffered some losses recently following a record run.
