Bitcoin stalls after huge daily jump
Bitcoin tumbled on Thursday after marking its biggest daily profit in five weeks yesterday, with the price gathering momentum around the $80,000 barrier.
Now global financial markets await important US inflation data for March, which could provide fresh pricing on the odds of a Fed May rate cut.
The Price
Bitcoin fell 1.6% at Bitstamp today to $81,300, with a session-high at $82,722.
On Wednesday, bitcoin added 8.3%, marking the biggest profit since March 2, as markets welcomed Trump’s decision to pause tariffs on most countries for 90 days.
Crypto Market Value
The market value of cryptocurrencies fell by $55 billion on Thursday to a total of $2.680 trillion.
US Rates
The recently released Federal Open Market Committee’s meeting minutes showed all members unanimously voted in favor of maintaining interest rates unchanged in March.
The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns
According to the Fedwatch tool, the odds of a May interest rate cut stood at 15%.
Gold hovers near historic highs before US inflation data
Gold prices rose in European trade on Thursday on track for the second straight profit, thus approaching a record high on strong haven demand as the US-China trade war deteriorated.
As the odds of a Fed 0.25% interest rate cut in May faded, investors are now waiting for important US inflation data later today to gather more clues.
Prices
Gold prices rose 1.65% today to $3132 an ounce, with a session-low at $3071.
On Wednesday, gold rose 3.35%, the first profit in five days, and the largest since October 2023 on concerns about the US-China trade war.
The precious metal hit a record high on April 3 at $3167 an ounce before entering a correction in the short term.
Erupting Trade War
US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.
The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.
Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .
The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.
US Rates
Separately, the Federal Open Market Committee’s meeting minutes showed all members unanimously voted in favor of maintaining interest rates unchanged in March.
The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns.
Policymakers believe that high inflation could be more resistant than expected, with mounting market uncertainty due to weaker consumer spending and high tariffs.
US Inflation Data
Later today, US consumer prices will be released, expected to show a slowdown to 2.5% in March from a 2.8% rise in February, while core prices are expected up 3.0% last month.
SPDR
Gold holdings at the SPDR Gold Trust rose 11.17 tons yesterday to a total of 937.09 tons, the highest since June 2023.
Sterling extends recovery as US pauses tariffs
Sterling rallied in European trade on Thursday against a basket of major rivals, expanding the gains for the third straight session against the dollar and moving away from five-week lows as the risk appetite rebounded after the US paused most tariffs for 90 days.
The odds of a Bank of England interest rate cut in May declined as recessionary risks receded, with traders now awaiting important UK data to gather more clues.
The Price
GBP/USD price rose 0.3% today to $1.2862, with a session-low at $12810.
The pound rose 0.45% on Wednesday against the dollar, marking the second profit in a row and moving away from five-week lows at $1.2708.
Positive Sentiment
The risk sentiment rallied in the market after US President Donald Trump paused reciprocal tariffs on most countries for 90 days.
It led to historic surges in global stock exchanges, including on Wall Street, in Europe and Japan as investors pick up bargain stocks with cheap prices.
UK Tariffs
US President Trump imposed 10% tariffs on UK imports starting April 2025, with this tariff holding as both sides negotiate trade terms in the next three months.
UK Prime Minister Keir Starmer said his government will deal with the crisis “calmly” with a focus on reaching a trade deal that protects British interests.
UK Treasury Secretary Scott Bessent expressed hopes on reaching deals with countries such as Britain before the tariff pause is lifted in July 2025.
UK Rates
As recession concerns declined, the odds of a Bank of England 0.25% interest rate cut at the May meeting slid from 75% to 55%.
