After the emergence of inflation data, the dollar fell and gave way to currencies and indices to rise, after long pressure from the Federal Reserve to raise interest rates.
On Thursday evening, gold rose nearly 600 points, which means $60 per ounce
The US inflation rate is expected to remain at 8% next month. Although the interest rate is expected to become felt in November and December, it is difficult under winter conditions and rising food prices to make a sharp change towards the end of the year.
Federal Reserve officials announced at their last meeting that they will act slowly from now on. However, the possibility of a 75 basis point hike in December has not yet been ruled out by the markets. Higher-than-expected inflation may fuel expectations that the Fed will slow after December. This may stop the recent decline on the dollar side.
The best possibility for inflation could be a dip below 8%, which could put the probability 75 basis points away from pricing in December and the potential for a slowdown could be priced further on the basis of a late rate reversal. However, this position can be priced in both possibilities relative to the dollar. While the first possibility is an anticipation of a decline, the second may be the expectation that policies are in place and progress is being made, which could create positive dollar pricing.
The British pound has reacted to the broader global risk sentiment, and thus the weekend’s moves are likely to depend on the direction the global equity markets are taking which are addressing losses after a number of midweek developments. With gains of 400 points, the price of the GBP/USD currency pair moved yesterday, to the resistance level of 1.1730, its highest in nearly two months, and settled around the 1.1700 level at the time of writing the analysis.
At the beginning of this week’s trading. The rise in the British pound saw sympathy with the positive investor mood emerging in global stock markets, but those gains were reversed on Wednesday amid a broader market sell-off centered on China and the turmoil in the cryptocurrency space. Chinese authorities have retracted persistent rumors that they were considering easing strict Covid measures.
Also this week, the cryptocurrency markets experienced a tough sell-off again. Panic sales, which started with FTX and Alameda, reached their peak when FTX, one of the largest cryptocurrency exchanges on the market, suspended withdrawals.
The FTX crisis, which has become a very serious issue for the industry, has pushed cryptocurrencies into free fall. At the request of FTX CEO Sam Bankman Fried yesterday evening, Changpeng Zhao announced that they have reached an agreement regarding Binance’s acquisition of FTX. However, this statement did not slow down the rate of decline, but rather increased backlash on Binance itself.
Bitcoin fell from the price of 18130 to the price of 15,660.