2024-01-03 09:12

Copyrighted Image by: Reuters Investing.com - The U.S. dollar steadied near two-week highs in early European trade Wednesday ahead of the release of the minutes of the Federal Reserve’s December meeting. At 04:10 ET (09:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 101.959, after surging just under 1% on Tuesday, which marked its best daily performance since March 2023. Dollar gains on risk aversion The dollar has made something of a comeback at the start of the new year, helped by a jump in U.S. Treasury yields, with the benchmark 10-year yield hitting an over two-week high in the previous session. A bout of risk aversion saw the S&P 500 and Nasdaq Composite close their first trading session of 2024 lower, as investors fretted that the minutes of the Fed’s December meeting, due later Wednesday, may not be as dovish as had been previously expected. “Markets are unwinding some dovish bets, and questioning stretched equity valuations, ultimately favoring defensive bets in FX,” said analysts at ING, in a note. Euro bounces after sharp loss In Europe, EUR/USD traded 0.1% higher at 1.0953, with the euro bouncing after having lost 0.95% on Tuesday, its largest daily decline since July last year. German unemployment data for December came in slightly better than expected, but this has done little to dilute the feeling generated by Tuesday’s weak eurozone manufacturing PMI release, which pointed to an economy in recession. “Dwindling risk sentiment definitely puts EUR/USD at risk of reconnecting with its depressed short-term rate differential, especially considering domestic economic news in the eurozone has remained rather grim,” ING said. “We think EUR/USD continues to face downside risks, and a return above 1.10 appears less likely than a decline to the 1.08 region.” GBP/USD rose 0.2% to 1.2643, with sterling rebounding having slumped 0.9% in the previous session, its sharpest daily fall in nearly three months. Yen falls sharply in thin volumes Elsewhere, USD/JPY traded 0.5% higher to 142.64, with the yen continuing to fall after dropping nearly 0.8% in the previous session. That said, these moves have occurred in thin volumes with Japanese markets shut for a week-long holiday. USD/CNY edged higher to 7.1448, with further losses limited by a stronger-than-expected midpoint fix from the People’s Bank of China after disappointing official purchasing managers index data earlier in the week. https://www.investing.com/news/forex-news/dollar-steadies-ahead-of-minutes-from-december-fed-meeting-3265976

2024-01-03 05:25

Copyrighted Image by: Reuters. Investing.com-- Gold prices fell in Asian trade on Wednesday, relinquishing a measure of recent gains as the dollar rebounded amid some uncertainty over the timing of the Federal Reserve’s interest rate cuts in 2024. The yellow metal saw a strong run-up in the final few trading days of 2023, amid growing optimism that the Fed will begin cutting rates by as soon as March 2024. Spot gold was still trading within $100 of a record high hit at the beginning of December. But markets appeared to be seeking more affirmation that the Fed will begin trimming rates early in 2024. This saw the yellow metal relinquish some recent gains, while the dollar rebounded sharply from near five-month lows on Tuesday. Spot gold steadied at $2,064.16 an ounce, while gold futures expiring in February fell slightly to $2,072.40 an ounce by 00:04 ET (05:04 GMT). Both instruments lost about 0.3% on Tuesday. Fed minutes, nonfarm payrolls awaited for more cues Anticipation of the minutes of the Fed’s December meeting- which are due later in the day- kept markets on edge, as analysts warned that the minutes may not strike as dovish a chord as expected. While the Fed signaled plans for rate cuts in 2024, Chair Jerome Powell provided scant cues on the timing or scale of the rate cuts. Several Fed officials had also pushed back against expectations for early rate cuts in the aftermath of the December meeting, given that inflation and the labor market were still running relatively hot. Still, the CME Fedwatch tool shows traders pricing in a nearly 70% chance of a 25 basis point rate cut in March 2024. Expectations of early rate cuts had driven a stellar rally in financial markets through most of December, particularly in the stock market. Gold had also logged a strong December rally, and may still have some more upward momentum in store. Lower interest rates bode well for the yellow metal, given that high yields push up the opportunity cost of investing in gold. Wednesday’s minutes also come before key nonfarm payrolls data due this Friday, which is expected to offer more cues on the labor market. A cooling labor market and softer inflation are the two main considerations for the Fed to begin trimming interest rates. Copper down on fresh China worries Among industrial metals, copper prices fell slightly on Wednesday, extending recent losses following weak economic data from top importer China. Copper futures expiring March fell 0.1% to $3.8652 a pound, pulling further away from a five-month high hit in late-December. Prices were also pressured by strength in the dollar. Weakness in China was a main point of contention for copper markets, as a post-COVID economic rebound largely failed to materialize in 2023. Markets were also awaiting U.S. purchasing managers index data for December, which is due later on Wednesday. https://www.investing.com/news/commodities-news/gold-prices-dip-as-dollar-rebounds-in-anticipation-of-fed-minutes-3265861

2024-01-03 04:42

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies nursed steep losses on Wednesday, while the dollar steadied after a sharp overnight rebound as anticipation of more cues on the Federal Reserve saw markets question expectations for early interest rate cuts. Sentiment towards Asia also remained fragile following weak economic data from China and a devastating earthquake in Japan. The Chinese yuan fell 0.1%, with further losses limited by a stronger-than-expected midpoint fix from the People’s Bank of China. The yuan saw renewed weakness this week after dismal purchasing managers index readings for December. The Japanese yen was static, with local markets closed for a week-long holiday. Dollar steadies after stellar rebound, more Fed cues awaited The dollar index and dollar index futures fell slightly in Asian trade, after surging about 0.8% in the prior session. The greenback was now trading comfortably above a more-than five-month low hit towards the end of 2023. Strength in the dollar came before the minutes of the Fed’s December meeting, which were due later on Wednesday. Analysts warned that the minutes may not be as dovish as markets are hoping- a scenario that is likely to dent risk sentiment. While the Fed signaled in December that it will begin trimming rates in 2024, it gave scant cues on the timing of the move. Fed officials also warned after the meeting that bets on early rate cuts were unfounded, given that inflation and the labor market were still running relatively hot. Nonfarm payrolls data for December is due this Friday, and is also expected to provide more cues on the labor space. While the reading is expected to show more cooling in the jobs market, it has also consistently beaten expectations through most of 2023. Still, the CME Fedwatch tool showed traders pricing in a nearly 70% chance for a 25 basis point cut in March 2024. Goldman Sachs expects the bank to cut rates up to five times this year. Broader Asian currencies traded sideways, cooling from a rally in December as risk appetite soured. The Australian dollar was flat after racing to a more-than five-month high in late-December, while South Korea’s won added 0.2% after falling sharply in the prior session. Most regional currencies were also nursing steep losses from Tuesday, following the dollar’s rebound. The Indian rupee fell 0.1% and moved back towards record lows hit in late-2023, while the Singapore dollar saw little strength even as data showed stronger-than-expected economic growth in the fourth quarter. https://www.investing.com/news/forex-news/asia-fx-dips-dollar-rebounds-as-markets-question-early-rate-cuts-3265851

2024-01-03 01:21

Copyrighted Image by: Reuters. Investing.com -- Oil prices rose Wednesday as the killing of a senior Hamas leader raised concerns that the conflict between Israel and Hamas could widen, increasing the likelihood of supply disruptions through the crucial Red Sea region. By 09:10 ET (14.10 GMT), the U.S. crude futures traded 1.1% higher at $71.12 a barrel and the Brent contract climbed 1.2% to $76.82 a barrel. Rising tensions in Red Sea The Hamas deputy leader Saleh al-Arouri was killed in a drone strike in Beirut, the capital of Lebanon, in a further sign that the nearly three-month war between Israel and Hamas was spreading across the region. Israel has neither confirmed nor denied that it killed the highly ranked Hamas leader, but it has kept up its assault on the Gaza Strip on Wednesday while Houthi rebels have also continued to attack vessels in the Red Sea. A wider conflict could close crucial waterways for oil transportation, adding a premium to the market. “While the geopolitical situation is a concern for the oil market, a fairly comfortable oil balance over the first half of 2024 does help to ease some of these worries,” said analysts at ING, in a note. U.S. inventories due The global oil balance has been impacted by U.S. production coming in at record highs in recent weeks, resulting in the market being less tight than initially expected in the first quarter of 2024. U.S. crude stockpiles from the American Petroleum Institute industry group are due later Wednesday, a day later than usual due to Monday’s New Year’s holiday, ahead of the official data on Thursday. A series of builds in U.S inventories over the past few weeks have rattled oil markets, especially as rising gasoline and distillate stockpiles pointed to cooling fuel demand in the largest consumer in the world. OPEC+ to meet in February - Bloomberg The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, will hold a Joint Ministerial Monitoring Committee meeting in early February, according to Bloomberg, with the members keen to discuss the state of the oil market. “However, given the scale of cuts we are already seeing, it will be increasingly difficult for the group to cut more if needed over the course of 2024. Already, the last few rounds of cuts have been driven by voluntary reductions from individual members rather than group wide cuts – a sign that it is becoming more difficult to get all members on board to cut,” ING added. https://www.investing.com/news/commodities-news/oil-prices-steady-after-weak-start-to-2024-rate-cuts-red-sea-in-focus-3265816

2024-01-02 10:42

Copyrighted Image by: Reuters. Bernstein sees Bitcoin ending 2024 at $80k before rising to $150k in 2025 Bitcoin (BTC) is on its way to hitting a fresh record high in 2024, before rising to as much as $150,000 in 2025, according to analysts at Bernstein. “We are about to embark on a new crypto era, marked by unprecedented mainstream institutional adoption, driving capital from traditional markets to crypto markets. This moment is unprecedented,” analysts said in a client note. “We are also in a favorable macro, with rates peaking, inflation declining and chances of monetary stimulus in a major election year globally. We are not brave enough to be circumspect, and we like Bitcoin and Bitcoin mining stocks way too much here.” The analysts fully expect the world’s leading asset managers to go live with a Bitcoin ETF either this week or next. While the ‘buy the rumor, sell the news’ scenario may take place, they urge investors to focus “on multiple bullish Bitcoin catalysts (halving, transaction fees inflection, ETF marketing) through the year.” “Don't sell the news, buy the dip. ‘Sell the news’ is like selling for a 15-20% correction, but miss out on the multi-bagger returns ahead,” the analysts added. One of the potential catalysts for BTC prices to propel higher in 2024 and 2025 could be much bigger-than-expected demand from corporate treasuries. “We expect Bitcoin to touch all-time highs in 2024 in the second half-post halving and may likely close the year at ~$80K (based on our marginal cost based estimate). Our estimate for 2025 remains $150K as cycle high.” “Crypto equities will hit mainstream institutional interest in 2024, as bears continue to get squeezed (given short interest) and equity investors feel under-exposed to crypto.” Elsewhere, the analysts also expect ETH to be the only non-BTC asset to get a spot ETF. “[C]ombined with its growing fees, scaling roadmap and sustainable token model, [this] will position ETH as the primary blockchain tech asset,” they added. https://www.investing.com/news/cryptocurrency-news/bernstein-sees-bitcoin-ending-2024-at-80k-before-rising-to-150k-in-2025-3265338

2024-01-02 09:12

Copyrighted Image by: Reuters Investing.com - The U.S. dollar edged higher in early European trade Tuesday ahead of this week’s key economic data that may provide clues on the Federal Reserve's next moves. At 04:00 ET (09:00 GMT), the US Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 101.125, recovering slightly from a five-month low after the greenback slid some 2% in 2023. Payrolls to guide dollar sentiment The dollar was hit hard by raised expectations that the Fed will begin trimming interest rates in 2024, with the CME’s Fedwatch tool showing traders pricing in an over 70% chance for a 25 basis point rate cut in March 2024. But until the March meeting, markets still have a barrage of key economic readings to contend with. U.S. manufacturing PMI data, due for release later Tuesday, is expected to show that this important sector remains in contraction territory, and minutes from the last Fed meeting in December are scheduled for release on Thursday. But most eyes will be on Friday’s nonfarm payrolls data for December. This is expected to show that the number of jobs created during the last month of 2023 fell to 163,000, from just under 200,000 the previous month. This slowdown in the labor market is widely expected to factor into monetary policy. Euro edges back from five-month high In Europe, EUR/USD traded 0.1% lower at 1.1031, inching away from last week’s five-month peak of 1.1139 after manufacturing PMI data confirmed the sector remaining firmly rooted in contraction territory throughout the region. The single currency gained 3% last year, its first yearly gain since 2020. GBP/USD rose 0.2% to 1.2751, with sterling having registered its strongest performance last year since 2017 with a 5% gain. That said, data released earlier Tuesday by the British Retail Consortium showed that U.K. food prices eased to 6.7% in December from 7.7% the previous month, the lowest level since June 2022. This will add to expectations that the Bank of England will start cutting interest rates in 2024, likely weighing on the pound. Yen slumps after major earthquake hits Japan Elsewhere, USD/JPY traded 0.5% higher to 141.55, even with Japanese markets shut for a week-long holiday, after a devastating earthquake in central Japan hit sentiment. USD/CNY traded 0.5% higher at 7.1346, as official purchasing managers index data showed further deterioration in manufacturing activity. While a private survey showed some strength in the sector, growth still remained largely modest, while employment and inflation failed to pick up substantially. The readings indicated little signs of recovery in Chinese economic activity at the end of 2023. https://www.investing.com/news/forex-news/dollar-edges-higher-ahead-of-key-economic-data-including-payrolls-3265271