Bitcoin Briefly Broke 4K | Sterling May Face Disappointment | Gold In Recovery Mode

Posted by Naeem Aslam | 13/09/2017 09:39

Bitcoin Broke the 4000 Mark, Bargain Hunters Stepped In
Sterling May Face Disappointment Due To Tepid Wage Growth
Yellow Metal Finding Some Strength

The European markets are trading lower as traders are sceptical about the Trump tax reforms. Steven Mnuchin, the Treasury Secretary assured the markets yesterday that it is still highly likely that some parts of the tax reforms may take place this year and they could be backdated to 01 January 2017. However, that momentum did not last for long because Disney World confronts a sad reality that nothing is that easy.
 
Bitcoin Broke the 4000 Mark, Bargain Hunters Stepped In
China's plan to shut down the domestic Bitcoin exchanges has taken a lot of wind out of Bitcoin. The PBOC has prepared a draft which would ban the Chinese platforms from offering Bitcoin trading- a serious blow for Bitcoin. Remember, the Asia region has massively influenced the demand for the Bitcoin. The fading geopolitical tensions are also impacting the Bitcoin price. As a result of all the negative news, traders have taken some profit off the table and the cryptocurrency broke the $4000 mark for the first time since it touched the €5000 level. The CEO of JP Morgan, Jamie Dimon has said that he will not hesitate to fire his traders if they touch Bitcoin. Perhaps, a more premature view. The digital currency is here to stay and under a more regulated environment, its volatility would ease off. Moreover, this is not the first time that Jamie Dimon has spoken against the currency, the last time he had a similar go on the currency was in November 2015. Since then, the currency has been having a remarkable run. Most importantly, given that the CEO does not think that shorting this trade would yield a more favourable outcome, shows that the cryptocurrency has a lot more room to run. The currency serves the best alternative for people/nations who do not have many options on the table for themselves.
 
Sterling May Face Disappointment Due To Tepid Wage Growth
If you want to see a currency which is having one of the best runs this week, then look no further. The British pound has seen tremendous strength this week and yesterday’s strong CPI reading provided further tailwind for the currency. Today we have the jobs data and the picture is going to be very familiar; the jobs creation number is likely to improve but the pay rise would be very modest. The GDP growth so far isn’t great and it is not going to get any better, therefore, the prospects for any lift for the wage growth are very limited. Under that circumstance, we do not anticipate that the Bank of England has a strong case to increase the interest rate because that would only turn off the oxygen supply for the consumers. Traders are going to keep a close eye on the upcoming labour market data over the next months as that would provide a clearer idea about how the economy is faring with the Brexit challenges.
 
Yellow Metal Finding Some Strength
The bargain hunters have stepped back in to support the yellow metal price. The metal touched the highs of 1357 due to two major affairs; the weakening prospect of the Fed increasing the interest rate this year and finally the escalation in the geopolitics. When it comes to geopolitics, they have faded largely, however, Donald Trump, the president of the US, has notched up things by demanding tougher sanctions on North Korea. The dollar weakness is also helping the metal today, but the gains are very minuscule.
 

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