The stock market is having a field day, but crypto? Not so much. Stocks are riding high, supported by growing expectations that the U.S. Federal Reserve might finally ease up on those relentless interest rate hikes.
Everyone’s eyes are glued to the Fed’s July meeting minutes, set to drop on Wednesday, and to whatever Fed Chair Jerome Powell is going to say at Jackson Hole this Friday.
The S&P 500, Nasdaq, and Dow Jones all showed signs of life as investors bet on a more lenient Fed. Though a few hours later, the S&P 500 had lost a bit of steam, down 0.2%, while the Nasdaq slipped 0.5%, and the Dow eased down by 0.2%.
Still though, the bulls are active.
The dollar’s wobble and gold’s glimmer
Now, while stocks are enjoying the ride, the dollar is stumbling around like it had a rough night out. It’s at its lowest point against the euro in nearly eight months, with the euro peaking at $1.1117 on Tuesday.
Sterling also got a nice little boost, hitting its highest level in over a year before settling at $1.3054. The dollar index? It’s sitting at 101.59, after hitting its lowest level since early January at 101.76 earlier in the day.
Gold, on the other hand, is loving this. Spot gold just hit another record high, reaching $2531.60 an ounce.
Why? Because a weaker dollar and the likelihood of U.S. rate cuts make gold a shiny bet. The dollar’s taking a beating against the yen too, down 0.6% at 145.77.
Traders are anxiously waiting for Bank of Japan Governor Kazuo Ueda’s appearance in parliament on Friday, where he’s expected to talk about the central bank’s decision last month to raise interest rates.
Bitcoin tries to make a comeback
While stocks are partying, Bitcoin’s been lurking in the shadows, trying to make a comeback. On August 20, Bitcoin made a push above $61,000, reviving some hope that it might be on the verge of a bullish reversal.
Bitcoin’s move contrasts sharply with the rest of the market, which has been mostly stagnant. But not everyone’s convinced. QCP Capital pointed out that “re-leveraging” among stock traders is one reason behind the rally in equities.
They noted that corporate share buybacks have surged to $1.15 trillion this year, and Goldman Sachs’ trading unit is seeing record demand from clients looking to buy the dips.
QCP Capital suggested that “risk-on sentiment could extend to crypto and gold, pushing BTC higher given the strong demand for topside calls.”
So, while Bitcoin’s been lagging, there’s still a chance it could join the party if the overall market sentiment changes.
