2024-03-19 04:45

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies fell on Tuesday as traders remained on edge before a Federal Reserve meeting this week, while the Japanese yen (USDJPY) weakened sharply after a historic rate hike by the Bank of Japan. The dollar firmed in Asian trade, seeing more inflows as uncertainty before the Fed and somewhat dovish signals from the BOJ kept markets biased largely towards the greenback. BOJ hikes rates, but USDJPY surges on accommodative outlook The yen weakened sharply after the BOJ’s first rate hike in 17 years, with the USDJPY pair surging as far as 150. The BOJ raised interest rates by 0.1%, bringing them to neutral territory after nearly a decade of negative rates. The bank also signaled an end to its yield curve control and asset purchase policies. But the central bank also said that uncertainty over the Japanese economy will keep monetary conditions largely accommodative for the “time being.” Its rate hike on Tuesday, while historic, also marks only a marginal move away from its ultra-dovish stance. This notion dented the yen, as the main point of pressure on the Japanese currency- high U.S. interest rates- remained unchanged. AUDUSD sinks on less hawkish RBA The Australian dollar also retreated on Tuesday, with the AUDUSD pair falling 0.4% after the Reserve Bank of Australia kept interest rates steady, but struck a less hawkish tone than markets were expecting. The RBA did not offer an explicit warning that interest rates could rise higher to combat sticky inflation, and instead offered largely vague cues on monetary policy remaining tight to offset high price pressures. Dollar near two-week high before Fed meeting The dollar index and dollar index futures rose about 0.2% in Asian trade, hitting a near two-week high in anticipation of a Fed decision on Wednesday. While the central bank is widely expected to keep interest rates steady, traders were on guard over a more hawkish than feared stance, especially following hotter-than-expected inflation readings for the past two months. Fears of the Fed kept most other Asian currencies trading weaker on Tuesday. The rate-sensitive South Korean won’s USDKRW pair rose 0.1%, as did the Singapore dollar’s USDSGD pair. The Indian rupee was flat, but the USDINR pair was seen creeping closer to the 83 level, which puts the rupee in sight of record lows. The Chinese yuan’s onshore USDCNY pair traded sideways, but remained in sight of the 7.2 level following middling readings on the Chinese economy. The offshore yuan’s USDCNH pair traded well above the 7.2 level, indicating negative sentiment towards the Chinese currency. https://www.investing.com/news/forex-news/asia-fx-falls-with-fed-meeting-on-tap-usdjpy-tests-150-after-boj-hike-3343231

2024-03-19 00:48

Copyrighted Image by: Reuters. Investing.com -- Oil prices settled higher Tuesday, driven by optimism about tighter markets this year following softer exports from Iraq and Saudi Arabia. By 14:30 ET (18:30 GMT), the U.S. crude futures settle 0.9% higher at $83.47 a barrel and the Brent contract rose 0.6% to $87.38 a barrel. Oil buoyed by tight supply outlook Oil prices have surged over the past week as signs of increased U.S. refinery activity, improved Chinese demand and persistent disruptions in the Middle East presented a tight outlook for oil markets. This notion was furthered by Iraq, the second biggest producer in the Organization of Petroleum Exporting Countries, stating that it will cut crude exports to compensate for higher production so far in 2024. "The move is primarily to absorb the oversupply from Jan’24-Feb’24 and to showcase the nation’s commitment to stick to its voluntary oil cuts as part of the OPEC+ agreement," according to analysts at ING, in a note. "Recent OPEC numbers showed that Iraq pumped 0.2m b/d of oil above its agreed quota of 4m b/d last month." Data from Saudi Arabia also showed crude exports from OPEC’s biggest producer fell for a second straight month in January. In Russia, Ukrainian attacks put a key fuel refinery out of commission. Signs of tighter supplies also come amid some improving economic indicators from major crude consumers, specifically China. The country’s industrial production and fixed asset investment grew more than expected in the first two months of 2024, while travel demand also recovered to pre-COVID levels during the Lunar New Year holiday. It remains to be seen whether China can carry this momentum into the coming months, especially as consumer spending still remains weak. Unemployment also unexpectedly rose in the January-February period. Fed decision awaited The Fed meeting kicked off on Tuesday, with the committee widely expected to keep interest rates on hold Wednesday,. But markets were wary of any more hawkish signals from the central bank, given that the U.S. economy has remained largely resilient to the higher interest rates, while inflation remained elevated over the past two months. While strength in the U.S. economy bodes well for fuel demand in the world's biggest fuel consumer, higher-for-longer rates could potentially stymie demand later in 2024. Beyond the Fed, focus this week is also on a barrage of purchasing managers index readings for March, from the U.S. and other major economies. Update on U.S. Crude stockpiles eyed The American Petroleum Institute announces its estimate of U.S. crude inventories later in the session. Economist expect that the weekly crude stockpiles rose by 77,000 barrels for the week ended March 15. Crude stockpiles have been declining following weeks of larger-than-expected builds amid a pick-up in refinery activity. The API report comes just a day ahead of Energy Information Administration's weekly inventory report that should show draws across crude, gasoline and distillate stockpiles, Macquarie said. "[W]ith the total US crude balance realizing much tighter than we had anticipated, marking a prolonged stretch of tighter-than-expected weekly balances," Macquarie said. https://www.investing.com/news/commodities-news/oil-prices-steady-at-4-mth-high-on-tight-supply-outlook-fed-awaited-3343129

2024-03-18 16:27

Copyrighted Image by: Reuters Bitcoin price has continued to move higher in March, which is in line with historical trends heading into the much-anticipated halving event. BTC price recently surged to over $73,000 correcting to below $65,000 on profit taking. At the time of writing, Bitcoin price exchanged hands at around $67,500. A year-to-date increase stands at more than 60% while the 12-month jump has exceeded 150%. “Bitcoin’s price recovery to previous ATH seems to be faster than previous cycles. Bitcoin’s price is above the previous ATH already, suggesting this cycle may be different and making a significant correction likely,” Menno Martens, Crypto Specialist and Product Manager at VanEck, said to Investing.com. Why is Bitcoin price rallying? The recent surge in Bitcoin price is partly driven by the growing demand for spot Bitcoin Exchange Traded Funds (ETFs), offering investors a less risky way to engage with cryptocurrency. These ETFs have seen a significant influx of investment, drawing attention for their potential in portfolio diversification. Spot Bitcoin ETFs differ from regular Bitcoin ETFs by allowing direct exposure to Bitcoin itself, rather than futures contracts. Managed by firms that issue shares of their Bitcoin holdings, these ETFs provide a bridge for traditional investors to enter the cryptocurrency space by purchasing shares on conventional stock exchanges, bypassing the need to directly hold or manage the cryptocurrency. Another reason why Bitcoin prices are rallying is related to the upcoming halving event. A Bitcoin halving is an event where the reward for mining Bitcoin transactions is cut by 50%, happening roughly every four years. This mechanism progressively decreases the speed at which new bitcoins are created and introduced into the market, aiming to halt the production of new bitcoins by around the year 2140. “Historically, Bitcoin halving events, which occur approximately every four years, have led to an increase in price,” Yuya Takemura, Founder of Axys Holding, told Investing.com. “The next halving in 2024 may follow this trend, possibly causing a significant price increase in 2025.” Speaking about other factors that are helping Bitcoin price to rally, Takemura also highlighted “increased participation by Generation Z, and the adoption of blockchain technology by governments and major financial institutions.” While Takemura acknowledges recent analyst projections that Bitcoin price could exceed $100,000, he also warned about “market's volatility and susceptibility to global economic conditions.” Bitcoin price outlook Investing.com recently wrote about JMP Securities saying Bitcoin price could hit $280,000 over the next three years as ETF inflows accelerate. “We estimate that after ~$10B in flows to date, two months into launch, flows will actually continue to grow materially from here over the next few years as the ETF approval is just the beginning of a longer process of capital allocation,” said JMP. Today, British brokerage firm Standard Chartered (OTC:SCBFF) came out with its own forecast. According to their analysts, the $150,000 level “now looks likely.” Hence, the bank raised its price target on Bitcoin to $150,000 from $100,000 to reflect “the more rapid pass-through from ETF inflows to the BTC price to date.” Moreover, Standard Chartered analysts see the ongoing Bitcoin price rally continuing. “USD 200,000 is the ‘correct’ end-2025 price level for BTC, in line with our previous price estimate, and that it is likely to be the new midpoint for a sideways trading range at that time.” “It also suggests that an overshoot to USD 250,000 is likely at some point in 2025 if ETF inflows continue apace and/or reserve managers buy BTC.” https://www.investing.com/news/cryptocurrency-news/bitcoin-price-standard-chartered-says-150000-level-in-2024-now-looks-likely-3342345

2024-03-18 12:21

Copyrighted Image by: Reuters. As Bitcoin once again captures attention, the concept of "halving" has emerged as a crucial factor influencing the cryptocurrency's value and market dynamics. As a result, many market participants are providing their latest bitcoin price prediction. Understanding the impact of halving on Bitcoin is essential for investors. Bitcoin halving occurs every four years. It is an event that halves mining rewards and reduces Bitcoin supply. As a result, the impact is hotly debated, with the leading cryptocurrency usually rising after the event. What is the price of Bitcoin After previous halvings, the price of Bitcoin has generally risen not long after. However, it is rare to see BTC hit a new all-time high ahead of the event. Bitcoin hit a new high of well over $73,000 last week, although it pulled back to above the $64,000 mark over the weekend. Nevertheless, it is now back over $68,000. For the year-to-date, Bitcoin is up more than 61%, while in the last 12 months, it has risen more than 152%. Bitcoin halving – Impact on price Speaking to Investing.com, Yuya Takemura, Founder of Axys Holding, noted that Bitcoin halving events typically lead to the price rising. “The next halving in 2024 may follow this trend, possibly causing a significant price increase in 2025,” said Takemura. “Considering Bitcoin's past performance and increasing adoption, a significant price increase in 2025 is plausible. Factors such as limited supply, growing institutional interest, and wider acceptance in payment systems play a role.” Takemura also recognized that the global recognition through ETF approvals, Gen Z's growing participation, and blockchain adoption by authoritative entities could impact the price. However, he cautioned that the Bitcoin market is volatile and susceptible to global economic conditions. Meanwhile, Menno Martens, a crypto specialist and product manager at VanEck, told Investing.com that “historical trends show that Bitcoin tends to rally before, during, and after halving events.” However, he said, “It should be noted that there are some exclusions, for example, Bitcoin also sees significant corrections of over 82% and 80% down during the 3rd and 2nd cycle respectively.” “Bitcoin’s price recovery to previous ATH seems to be faster than previous cycles. Bitcoin’s price is above the previous ATH already, suggesting this cycle may be different and making a significant correction likely,” cautioned Martens. He believes that what sets this particular halving apart is the introduction of a Spot Bitcoin ETF in the US market. “While similar products, like the VanEck Bitcoin ETN, have been available since 2020, the launch of a Spot ETF in the US is seen by many as a watershed moment for Bitcoin, akin to the IPO of a major asset,” he added. “Comparisons are drawn to the effect of ETFs on the gold market, where an eight-year bull run followed the launch of gold ETFs.” Furthermore, Martens explains that ETFs play a significant role in market dynamics, holding over 4.2% of circulating Bitcoin and absorbing a considerable portion of newly minted coins daily. As a result, he believes the absorption may intensify post-halving, potentially reducing the available Bitcoin supply for non-ETF investors. “If demand remains high, as observed in recent weeks, this could theoretically lead to significant price appreciation,” he said. “The risk is that Bitcoin could also see significant corrections.” Bitcoin price prediction Elsewhere, in a recent research note, analysts at JMP Securities said they believe Bitcoin price could reach a high of $280,000 within the next three years, driven by the anticipated Bitcoin ETF inflows. “We estimate that after ~$10B inflows to date, two months into launch, flows will actually continue to grow materially from here over the next few years as the ETF approval is just the beginning of a longer process of capital allocation,” JMP wrote. The investment firm calculates around $220 billion of incremental flows into Bitcoin ETFs over the next three years. “We estimate a current multiplier of ~25x, which on our flow estimate would equate to an incremental $280K per Bitcoin,” they added. Meanwhile, Bernstein said it is now “more convinced” about its $150K price target for Bitcoin. “Bitcoin today is at $71K, we expected this to break out post-halving. We built Bitcoin institutional flows in our estimates to arrive at Bitcoin price. We estimated $10Bn inflows for 2024 and another $60Bn for 2025,” the firm explained. https://www.investing.com/news/cryptocurrency-news/bitcoin-price-prediction-what-is-the-impact-of-halving-on-btc-3341834

2024-03-18 09:58

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar edged lower in European trade Monday, handing back some of the previous week’s gains ahead of the upcoming Federal Reserve policy-setting meeting. At 06:00 ET (10:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.035, after gaining around 0.5% last week, its first weekly gain in four. Dollar slips marginally ahead of Fed meeting The U.S. currency has started the new week on a slightly negative note, but remains near two-week highs after strong U.S. inflation readings from last week put traders on guard over any hawkish sentiments from the Fed, with the U.S. central bank holding a two-day policy-setting meeting this week, concluding on Wednesday. Markets are currently pricing in around 75 basis points of cuts this year, down from around 140 bps at the start of the year, with around a 60% chance of the first rate cut coming by June, according to LSEG data. The focus on Wednesday will be on whether Fed policymakers change their projections of rate cuts, or dot plots, for the year. “There are currently three 25bp rate cuts in the median 2024 Dot Plot, but projections are so dispersed that it would only take two FOMC members changing their ‘dot’ to take the median to two or four rate cuts this year,” said analysts at ING, in a note. “We expect an unchanged Dot Plot but admit that a hawkish revision looks more likely than a dovish one.” Euro just higher In Europe, EUR/USD edged 0.1% higher to 1.0899, after eurozone consumer prices were confirmed falling nearer to the European Central Bank’s 2% medium-term target in February. The final eurozone CPI came in at 2.6% on an annual basis in February, a drop from 2.8% the prior month, as widely expected, while the core annual number fell to 3.1% from 3.3% in January. There are a number of ECB speakers due this week, including President Christine Lagarde on Wednesday, and the latest noises emerging from this central bank have tended to point to a rate cut in June. "My current view is that the picture should be sufficiently clearer when the Governing Council meets in June (as we will have a lot more information – particularly on wage dynamics – available in our deliberations) to give us sufficient confidence to make monetary less restrictive," policymaker Gabriel Makhlouf said on Friday, adding to this opinion. GBP/USD traded 0.1% lower at 1.2738, with the Bank of England widely expected to keep rates unchanged when it meets on Thursday. “After dropping its hawkish tone in February, we don’t see the Bank being in any rush to take further steps to the dovish side of the spectrum just yet, at least barring a major downward surprise in CPI on Wednesday,” ING said. Volatile yen ahead of BOJ meeting In Asia, USD/JPY traded 0.1% higher to 149.22, amid volatile trading ahead of the upcoming Bank of Japan meeting. The BOJ kicked off its two-day meeting earlier Monday, with a hotly anticipated decision due on Tuesday. USD/JPY had fallen as far as 146 on speculation that the central bank was set to end its ultra-dovish policies, but traders still remained split over whether the bank will raise rates in March or April, with general consensus leaning slightly towards an April move. USD/CNY edged 0.1% higher to 7.1982, after the release of a series of economic data that offered mixed cues on the Chinese economy. While industrial production grew more than expected in the first two months of 2024, retail sales missed expectations and unemployment unexpectedly rose. The People’s Bank of China is also set to decide on its loan prime rate this week, but is widely expected to leave the rate unchanged. https://www.investing.com/news/forex-news/dollar-hands-back-some-gains-ahead-of-fed-meeting-euro-marginally-up-3341457

2024-03-18 04:40

Copyrighted Image by: Reuters. Investing.com-- Gold prices regained some ground Monday, but sentiment on the yellow metal soured by growing expectations that the Federal Reserve may lean less dovish on monetary policy later this week. Spot gold rose 0.1% to $2,164.05 an ounce. Fed meeting awaited for more cues on interest rates The Fed's two-day meeting, which ends on Wednesday, is expected to culminate in an unchanged decision on interest rates, but an updated outlook for the rate path ahead and economy will garner the bulk of attention. While a June rate cut continues to priced in as more likely than not, Goldman Sachs said it see a slower rate-cutting cycle following data showing recent economic strength and hitter-than-expected inflation. ANZ analysts said in a recent note that gold prices could fall as low as $2,100 an ounce in the near-term. But they also upgraded their end-2024 price target for the yellow metal to $2,300 an ounce, stating that an eventual interest rate cut and deteriorating economic conditions were likely to support demand for the yellow metal this year. Other precious metals retreated on Monday. Platinum futures fell 2.4% to $920.65 an ounce, while silver futures slid 0.5% to $25.26 an ounce. Copper prices retreat after mixed Chinese data Three-month copper futures on the London Metal Exchange fell 0.3% to $9,045 a ton on Monday, while one-month U.S. copper futures rose 0.2% to $4.13 a pound. While both instruments weakened, they remained in sight of 11-month highs hit last week, after media reports showed that China’s biggest copper smelters were planning production cuts. Such a scenario presents a supply shortage of refined copper, and was a key driver of copper’s rally. But this rally somewhat cooled on Monday following mixed economic data from China. While industrial production rose more than expected in the January-February period, retail sales missed expectations, while unemployment hit a five-month high. The mixed data raised concerns over weak economic growth in the world’s biggest copper importer, which could hurt its appetite for the red metal. https://www.investing.com/news/commodities-news/gold-prices-sink-below-2150-ahead-of-fed-meeting-copper-rally-cools-3341218