The recent price decline in various financial markets has triggered widespread liquidations across the cryptocurrency sector, totaling a staggering $860.55 million in just 24 hours. This upheaval is being fueled by renewed concerns over trade tensions, as US President Donald Trump's tariff policy rekindles fears of a trade war. These uncertainties have spurred a global wave of risk-aversion, affecting currencies, commodities, and stocks worldwide.
Gold, traditionally a safe-haven asset, has resumed its downward trend, now trading below the pivotal $2,760 mark. Meanwhile, the EUR/USD currency pair has extended its recovery, trading above 1.0500. In contrast, the US stock index futures have experienced a sharp decline, reflecting investor anxiety. The US Dollar is also struggling to maintain its strength amid these market shifts.
Bitcoin, the leading cryptocurrency, has not been spared from the market turmoil. After hitting a new all-time high of $109,588, it has plummeted nearly 4%, mirroring the broader market sentiment. As capital market participants brace for potential interest rate cuts in both the Eurozone and the US, attention is firmly focused on the impending announcements from central banks.
The US Federal Reserve is anticipated to implement two interest rate cuts of 25 basis points each this year. Concurrently, the European Central Bank (ECB) is expected to cut rates four times by 25 basis points. These anticipated policy shifts have placed additional pressure on the US Dollar, which is struggling to preserve its strength ahead of the Fed's announcements.
Central banks' policy decisions are dominating headlines this week, as market participants eagerly await clarity on future monetary policies. Amidst these developments, GBP/USD has managed to regain traction, trading marginally higher near 1.2500.