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Stocks tumble, dollar stable ahead of Fed minutes; cryptocurrency flies By Reuters
By Kevin Buckland and Lawrence White
TOKYO/LONDON (Reuters) – Stocks slipped lower while the dollar held steady on Tuesday as investors awaited the minutes of the Federal Reserve’s latest policy meeting to gauge the timing and extent of possible interest rate cuts this year.
Gold fell from Monday’s all-time high, as it fell on fears that U.S. interest rates will remain higher for longer as Fed officials maintained a cautious view on a recent easing of inflation.
Cryptocurrencies Ether and Bitcoin rose to new six-week highs amid speculation that the U.S. Securities and Exchange Commission (SEC) could approve a spot Ether exchange-traded fund.
Markets are currently factoring in about 41 basis points of rate cuts from the Fed this year, with a quarter-point cut fully priced in for November.
Traders rushed to rebuild bets on easing after data earlier this month showed consumer price pressures eased in April after three months of upside surprises at the start of the year.
Even so, Fed officials are reluctant to declare the fight against inflation over, with Vice President Philip Jefferson saying Monday that it’s too early to say whether the slowdown will be “long-lasting,” and Vice President Michael Barr saying he said the restrictive policy needs more time. .
The minutes of the latest Fed meeting scheduled for Wednesday could provide valuable insights into the future policy path, although the deliberations predate last week’s weaker CPI reading.
Europe’s benchmark STOXX index of 600 stocks slipped 0.3%, following an earlier 0.9% decline in MSCI’s broadest index of Asia-Pacific shares outside Japan.
US markets looked set to follow the muted tone, with Nasdaq futures down 0.08%, while holding steady after Monday’s 0.1% gain.
“Market sentiment remains relatively robust, with low implied volatility, supported by greater confidence in U.S. rate cuts this year,” Kyle Rodda, senior market analyst at Capital.com, wrote in a note.
At the same time, all-time highs for metals like gold “are being held up as a sign that economic activity is improving globally, and this could be a factor keeping inflation sticky,” Rodda said.
Gold fell 0.3% to around $2,417 an ounce, after pushing to the cusp of $2,450 for the first time overnight.
The greenback held its ground against major currencies, trading flat at 104.62 after rebounding from a five-week low of 104.07 hit on Thursday.
The value remained little changed at 4.4355%, after rising 1.7 basis points on Monday.
futures fell 0.8% to $83.04 a barrel and U.S. West Texas Intermediate (WTI) crude fell 0.7% to $79.16.
Meanwhile, traders bought cryptocurrencies following a report that the SEC had suddenly asked exchanges that want to trade ether ETFs to update regulatory filings, raising bets that approval could come this week.
rose to $71,957 and ether jumped to $3,720.80, both reaching levels not seen since April 9.
“Ether ETF speculation certainly played its part in the move, adding fuel to the crypto bull market bonfire that had reignited following last week’s colder US CPI data,” the analyst said by IG Tony Sycamore.
Sycamore expects Bitcoin to retest its all-time high at $73,803.25 in the near future before pushing towards $80,000.