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Bitcoin plummets whilst USD rises despite PPI miss

Summary:

  • Cryptocurrencies are in something of a bloodbath with Bitcoin falling 10%
  • Gold falls despite lower than expected US inflation data; USD higher across the board
  • Oil near weekly highs despite largest DOE build in 6 months
  • GBP drops on unchanged wage data

The main story of the day’s session is the precipitous drop seen across the cryptocurrency space with Bitcoin down by more than 10% at one point. Bitcoin has experienced an outstanding rally so far mainly on the back of growing acceptance among various countries. However, after the price achieved $5000 a more extended decline has begun. China is mostly to blame here but remarks from the CEO of JP Morgan added to declines. Is the Bitcoin bull market over?

The US dollar is adding to its recent gains and on the European close is in fact higher across the board. The rise is all the more impressive given the only economic release of note from the US this afternoon has seen the latest PPI figures come in below consensus forecasts - although they did rebound out of negative territory

A big jump in the weekly DOE crude oil inventory change has had a limited impact on the price of oil, with Oil.WTI remaining supported and moving back above the $49 handle. US stock piles rose by 5.9M over the past 7 days, compared to an expected rise of 4.1M against a prior print of 4.6M. From a daily perspective Oil.WTI has risen in each of the last 3 sessions after experiencing a sharp decline on Friday. This may be explained by traders shorting the market ahead of the weekend when Irma was due to hit the US for fear of further damage to the already reduced refinery capacity. With early estimates of the storm damage being not as bad as feared we’ve seen a recovery in price this week but the market remains below what could be seen as key resistance at 49.40.

Elsewhere in the commodity space Copper has dropped to its lowest level in 3 weeks. After the large drop of around 3% last Friday, there’s been further weakness today and traders are now starting to question whether the recent uptrend is over. Since making an interim low back in May, price has set off an an incredible rally, rising from a low of 5427 to a peak of 6923 last week. This 27% gain has been one of the biggest stories of the year but the declines seen in recent sessions are threatening to derail the push higher.

This morning saw the latest UK employment data released and despite the unemployment rate falling to a 42-year low, a failure to see a pick up in the average earnings component has seen the paring of some recent GBP gains

 

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