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Bitcoin tries to recover from recent lows amid mounting pressures
Bitcoin rose on Friday for the first time in five sessions away from recent three-week lows on short-covering.
However, the world’s most valuable cryptocurrency is still heading for the second weekly loss in a row amid mounting pressures, including the higher US 10-year treasury yields.
The Federal Reserve is now increasingly likely to hold interest rates unchanged in November, with traders awaiting US producer prices data later today to gather more clues.
The Price
Bitcoin rose 1.6% at Bitstamp to $61,225, with a session-low at $60,031.
Bitcoin lost 0.4% on Thursday in what was the fourth daily decline in a row, plumbing three-week lows at $58,867.
Crypto Market Value
The market value of cryptocurrencies rose by $50 billion on Friday to a total of $2.240 trillion as both bitcoin and ethereum rebounded.
Weekly Trades
Bitcoin is down 3% so far this week, on track for the second weekly losses in a row.
US Yields
US 10-year treasury yields rose 0.9% on Friday, resuming the gains after a short hiatus, and about to hit three-month highs at 4.12%.
It comes after investors reduced the odds of aggressive Federal Reserve interest rate cuts later this year.
US Rates
Investors reduced the odds of aggressive interest rate cuts by the Federal Reserve this year, following strong US labor data.
The Federal Reserve’s September meeting minutes showed Fed Chair Jerome Powell faced resistance from some members on cutting rates by 50 basis points, with some preferring a smaller 0.25% cut.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 85%, while the odds of no changes stood at 15%.
Now investors await US producer prices data later today for September, expected up 1.6% y/y in September, slowing down from 1.7% in August.
US dollar heads for second weekly profit in row
The US dollar gained ground in European trade on Friday against a basket of major rivals, maintaining gains for the fourth straight session and approaching two-month highs, while also heading for the second weekly profit in a row.
The gains come as US 10-year treasury yields rallied as well following bullish remarks from Fed officials and strong US consumer prices data.
Now investors await important US producer prices data later today to gather more clues on the state of inflation.
The Index
The dollar index rose 0.1% today to 102.96, with a session-low at 102.77.
The index rose mildly on Thursday and scaled a two-month high at 103.18.
Weekly Trading
The dollar index is up 0.5% so far this week, on track for the second weekly profit in a row.
US Yields
US 10-year treasury yields rose 0.9% on Friday, resuming the gains after a short hiatus, and about to hit three-month highs at 4.12%.
It comes after investors reduced the odds of aggressive Federal Reserve interest rate cuts later this year.
US Rates
Investors reduced the odds of aggressive interest rate cuts by the Federal Reserve this year, following strong US labor data.
The Federal Reserve’s September meeting minutes showed Fed Chair Jerome Powell faced resistance from some members on cutting rates by 50 basis points, with some preferring a smaller 0.25% cut.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 85%, while the odds of no changes stood at 15%.
Now investors await US producer prices data later today for September, expected up 1.6% y/y in September, slowing down from 1.7% in August.
Gold moves in a positive zone as dollar stalls
Gold prices rose in European trade on Friday and rebounded off three-week lows as the dollar stalled against most major rivals.
Despite the current gains, gold is still heading for the second weekly loss in a row as the odds of an aggressive interest rate cut by the Federal Reserve in November faded.
Prices
Gold prices rose 0.65% today to $2647 an ounce, with a session-low at $2628.
On Thursday, gold prices rose 0.85%, marking the first profit in seven sessions and moving away from three-week lows at $2602.
Weekly Trades
Gold prices are down 0.25% so far this week and could end up with the second weekly decline in a row.
The US Dollar
The dollar index dipped 0.1% on Friday for the first session in four away from two-month highs at 103.18 against a basket of major rivals.
The decline comes after weak US labor data, which showed unemployment claims rose for the second straight week.
US Rates
Investors reduced the odds of aggressive rate cuts by the Federal Reserve this year after a spate of strong US labor data, and after the Fed’s latest meeting minutes showed division among members on the pace of rate cuts.
US consumer prices released this week showed inflation remains above expectations.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 85%, while the odds of no changes stood at 15%.
Now investors await US producer prices data later today for September, which will likely impact the USD/JPY standing.
SPDR
Gold holdings at the SPDR Gold Trust remained unchanged yesterday for the fourth day at 876.26 tonnes.
Yen resumes losses on interest rate gap concerns
The Japanese yen fell in Asian trade on Friday against a basket of major rivals, resuming losses after a short hiatus against the US dollar, and about to touch two-month lows once more amid concerns about the Japan-US interest rate gap.
A series of bearish remarks from Japanese officials reduced the odds of a third Japanese interest rate hike this year, while the odds of an aggressive US interest rate cut in November receded.
The Price
The USD/JPY pair rose 0.15% today to 148.79 yen per dollar, with a session-low at 148.40.
The yen rose 0.5% yesterday against the US dollar, marking the first profit in three days and moving away from two-month lows at 149.54 yen.
The yen also rebounded as US treasury yields stalled after negative US unemployment claims data.
Japanese Rates
A series of bearish remarks by new Japanese PM Shigeru Ishiba and several BOJ officials reduced the odds of an October interest rate hike by the Bank of Japan, in turn hurting the yen’s standing.
US Rates
Investors reduced the odds of aggressive interest rate cuts by the Federal Reserve this year, following strong US labor data.
The Federal Reserve’s September meeting minutes showed Fed Chair Jerome Powell faced resistance from some members on cutting rates by 50 basis points, with some preferring a smaller 0.25% cut.
According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in November stood at 85%, while the odds of no changes stood at 15%.
Now investors await crucial US consumer prices data later today for September, which will likely impact the USD/JPY standing.
Interest Rate Gap
The current Japan-US interest rate gap stands at 475 basis points, the lowest since early 2023, and will likely remain unchanged until the Federal Reserve’s November meeting.