Bitcoin takes a bath After falling around 9%, some Bitcoin bulls might think today’s pressure was just a flesh wound.  The momentum with Bitcoin swings should make every crypto trader nervous.  Bitcoin was under pressure after US officials announced the seizing of USD2.3 million in cryptocurrency ransom paid by Colonial Pipeline Co.  The US government took over the server where the wallet existed and somehow got the private key for the address that held the majority of the funds.  This uncertainty over how they got their private key is scaring many bad players to exit bitcoin holdings. Bitcoin extended declines after the IRS Chief called on congress for authority to regulate cryptocurrencies.  Bitcoin is dangerously approaching the USD30,000 level as regulatory fears grow and as retail … [Read More...]

Oil sees another week of strong gains Oil is pushing higher on Friday, recouping mild losses from yesterday. While momentum appears to be slowing, oil is still on track to book gains of more than 4% across the week, following on from over 4% gains in the previous week. Optimism surrounding the demand outlook is driving prices higher. Markets are shrugging off the prospect of an increased oil supply entering the market in the coming month following OPEC’s decision to continue with its current plan of easing output restrictions. The broad narrative in the market is one of US economic strength, which is supportive of rising oil demand. As the vaccine rollout continues in the US and Europe, oil demand is only expected to continue increasing … [Read More...]

The euro continues to struggle this week and hasn’t posted a winning daily session since Monday. In the European session, EUR/USD is trading at 1.2112, down 0.12% on the day. US dollar jumps as Fed reduces corporate purchases The US dollar flexed some muscles on Thursday, as EUR/USD fell by 0.68%. The dollar jumped after the Federal Reserve announced that it would begin to reduce its corporate bonds portfolio. The Fed ended its purchase of corporate bonds in 2020 but had not given an indication until now as to its intentions. The Fed has made clear that the sale of corporate bonds is not a monetary policy action, as it does not affect the purchase of government bonds. Despite this clarification, the move drew a strong … [Read More...]

The British pound has reversed directions on Tuesday. The pair is currently trading at 1.4173, down 0.29% on the day. On the fundamental front, UK Manufacturing PMI accelerated for a fourth straight month. The PMI surged in May, rising from 60.9 to 65.6. Still, analysts had expected more, as the consensus stood at 66.1. The 50-level separates contraction from expansion. The manufacturing sector has now reeled off 12 consecutive months of expansion. As Covid infection rates continue to drop, the UK government has been easing health restrictions and economic activity is enjoying a resurgence. As the economy heats up, speculation has been rising as to whether the Bank of England will have to re-evaluate its ultra-accommodative monetary policy. Investors are keeping a close eye on comments from BoE policymakers, and … [Read More...]

The Australian dollar is in positive territory on Monday. In the European session, AUD/USD is trading at 0.7733, up 0.32% on the day. Inflation takes a dip The week started out on a sour note, as inflation fell in May. The Melbourne Institute (MI) Inflation Gauge, a monthly release, fell 0.2% in May, marking its first decline in seven months. With major economies showing stronger growth in the post-Covid era, central bank officials are keeping a close eye on inflation, as higher inflation could prod the central banks to tighten policy sooner rather than later. The MI release is just one reading, but if upcoming inflation data shows that inflation is not moving higher, then the RBA will not be under pressure to scale back its … [Read More...]

The Australian dollar is flat in the Tuesday session. In the North American session, AUD/USD is trading at 0.7754, up 0.01% on the day. Will Construction Work Done rebound? Investors will be keeping an eye on Construction Work Done, a useful gauge of the strength of the construction sector (Wednesday, 1:30 GMT). Construction Work Done has sputtered, posting 10 straight losing quarters. However, the consensus is that the indicator will show a strong rebound in the first quarter, with an estimate of 1.9%. If the reading is within expectations, the Aussie could respond with gains. The Federal Reserve continues to stick to its message that its ultra-accommodative policy will continue and that will maintain current QE levels. Inflation surged in April, which led to speculation that the Fed … [Read More...]

Fed governors reiterate that inflation is transitory Inflationistas look like they might be ready to throw in the towel.  We are supposed to be seeing accelerating growth and mounting price pressures, but right now the surge across commodity prices has eased (copper, lumber, iron ore, and even soft grains), the housing market hit a top, and consumers’ short-term optimism retreated.  The inflation debate is not over, but the majority of Wall Street believes it will be transitory. Chicago Fed’s Evans noted that the recent inflation rise does not herald persistent move up and that he has not seen anything to change his support for Fed’s stance.  Richmond Fed’s Barkin stated that market measures of inflation haven’t exceeded the Fed’s target. US stocks struggled to hold … [Read More...]