Bitcoin tumbles, is now legal tender in El Salvador

My attitude is that I always want to be better prepared than someone I’m competing against. The way I prepare myself is by doing my work each night. - Marty Schwartz

 

 

HEADLINES

 

 

• Firmer U.S. yields pushes dollar higher for second day
• USD/CAD rallies above 1.2600 and reaches weekly high ahead of the BoC
• Oil slides on demand concerns, strong dollar
• Gold suffers sharpest daily tumble in a month, settles below $1,800
• Big Tech fuels Nasdaq record, S&P 500 dips
• Bitcoin Tumbles Most Since May and El Salvador Buys the Dip
• USD/CAD to plummet below 1.25 in fall – ING

 

 

FOREX

 

 

Firmer U.S. yields pushes dollar higher for second day

 

The dollar rose for a second straight day on Tuesday, moving further off a near-one month low hit last week, as rising U.S. Treasury yields prompted investors to cut short dollar positions against the euro before a European Central Bank meeting this week. Cryptocurrencies including Bitcoin also dropped sharply in volatile trading as several trading platforms said they experienced performance issues.

 

USD/CAD rallies above 1.2600 and reaches weekly high ahead of the BoC

 

The USD/CAD has climbed during the American session and is trading at 1.2636, up 0.82% at the time of writing. Earlier in the Asian session, it dipped to 1.2519, setting a daily low, though it cut its losses on the back of broad US dollar strength and reached a weekly high at 1.2643.

On Wednesday, the Bank of Canada will hold its monetary policy meeting. The market expects the bank to keep the interest rate at 0.25% and its bond purchases at CAD 2 billion per week.

 

 

COMMODITIES

 

 

Oil slides on demand concerns, strong dollar

 

Oil prices fell on Tuesday, pressured by a strong U.S. dollar and concerns about weak demand in the United States and Asia, although ongoing production outages on the U.S. Gulf Coast capped losses. U.S. West Texas Intermediate crude settled down 94 cents or 1.4% from Friday's close at $67.35 a barrel, and touched a session low of $67.64. There was no settlement price for Monday due to the Labor Day holiday in the United States.

 

Gold suffers sharpest daily tumble in a month, settles below $1,800

 

Gold futures decline Tuesday, with their sharpest daily fall in about a month, pulling prices back below $1,800 as the U.S. dollar strengthened and Treasury yields climbed, weighing on appetite for precious metals. The drop in prices is a “reaction to dollar strength and rising Treasury yields,” Michael Armbruster, managing partner at Altavest, told MarketWatch.

 

 

STOCKS

 

 

Big Tech fuels Nasdaq record, S&P 500 dips

 

The Nasdaq rose to its highest level ever, lifted by Big Tech stocks that have fueled Wall Street's gains in recent years. Apple climbed 1.5% and Netflix added 3%, both also hitting record highs. Much of the rest of Wall Street fell. Eight out of eleven sub-indexes traded lower, with economy-sensitive sectors like industrials, real estate and materials leading declines. Tepid August payrolls data on Friday last week raised concerns that the economic recovery was slowing down.

 

 

CRYPTO

 

 

Bitcoin Tumbles Most Since May and El Salvador Buys the Dip

 

Bitcoin tumbled 11.3%, the most since May, leading a broad retreat from digital assets even as bullish investors touted El Salvador’s adoption Tuesday of the largest cryptocurrency as legal tender. As of press time bitcoin was changing hands around $46,7561, down from over $52,000 earlier in the day. At one point during the selloff the largest cryptocurrency tumbled as low as $42,900.

 

 

ANALYSIS

 

 

USD/CAD to plummet below 1.25 in fall – ING

 

“Markets are starting to speculate that the BoC will turn more cautious on policy normalisation. We think much will depend on incoming jobs data: should we see a consolidation in employment gains, and adding a 3.7% inflation, we think the BoC will stay on track to end QE by year-end and start hiking in 2H22.”

“Despite less supportive domestic drivers at the moment, we still favour USD/CAD below 1.25 in fall, as CAD retains some rate attractiveness and can benefit from fresh search for carry.”

 

 

CHART

 

 

Bitcoin – Daily Candlesticks

Source: GKFX Prime Metatrader 4

Bitcoin sold off heavily on Tuesday, dropping back from the supply area created before the May sell-off and failing to hold a break above the 61.8% Fibonacci retracement of the decline from record highs. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/usd-cad-to-plummet-below-125-in-fall-ing-202109071115
https://www.fxstreet.com/news/usd-cad-rallies-above-12600-and-reaches-weekly-high-ahead-of-the-boc-202109071857
https://www.investing.com/news/stock-market-news/futures-lower-as-worries-over-economic-recovery-weigh-2609244
https://www.investing.com/news/commodities-news/oil-slides-on-demand-concerns-strong-dollar-2608923
https://www.marketwatch.com/story/gold-futures-set-for-sharpest-daily-tumble-in-a-month-as-treasury-yields-and-u-s-dollar-rise-11631016789
https://www.cnbc.com/2021/09/07/forex-markets-dollar-european-central-bank-reserve-bank-of-australia.html