Latest news with #EuropeanCentralBank
Yahoo
3 hours ago
- Business
- Yahoo
5 Macro Trends Likely to Send Bitcoin and XRP Skyrocketing in 2026
Macroeconomic factors have big implications for Bitcoin and XRP. Five such factors are currently becoming tailwinds for these two coins. Most of these trends will take a couple of years to play out in full. 10 stocks we like better than Bitcoin › Water seeks its own level, and so does money. When cash becomes plentiful in the financial system, scarce digital assets such as Bitcoin (CRYPTO: BTC) and XRP (CRYPTO: XRP) often move sharply higher. Looking toward 2026, there are five macroeconomic forces that appear ready to remove several roadblocks that have held crypto back during the past two years. XRP and Bitcoin are likely to go higher as a result. Here's why each matters. Think of liquidity as the total pool of spendable cash in the global economy. When central banks add money to their respective national financial systems, usually by enlarging their balance sheets, investors have more capital to deploy, and riskier assets like major cryptocurrencies benefit first. And since mid-2024, the total combined assets of the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan have ticked higher for multiple quarters in a row. During the last comparable upswing, from March 2020 to April 2021, Bitcoin leapt 500%, while XRP surged 483%. So if major central banks keep refilling the punch bowl, history suggests another party for crypto prices, assuming nothing spoils the fun. Interest rates set the cost of borrowing money from central banks. Lower borrowing costs make cash cheaper and thus push investors to seek higher-return alternatives to government bonds, including leading digital assets like Bitcoin and XRP. The Fed is now widely anticipated to trim its benchmark interest rate by mid-2026, which implies at least a couple of interest rate cuts in the very near future. In 2019, when the Fed cut rates by almost 1 percentage point, Bitcoin rose 120% in five months, and XRP climbed 17%. That exact performance probably won't be replicated this time around, assuming things proceed as expected. But it will still likely be bullish for these coins. The U.S. Dollar Index is down roughly 8% so far in 2025 as worries over trade tensions and federal deficits mount. A weaker dollar means that global investors need fewer units of their local currency to buy dollar-denominated Bitcoin or XRP, which could have the effect of juicing demand. In 2017, a similar dollar slide that lasted through the start of 2018 preceded a jump in Bitcoin's market cap by a multiple of 13.5, and pushed XRP to rise by a shocking multiple of 34.6. As long as tariffs remain a topic of conversation for the U.S. economy, there could be a tailwind in play here. Government bond yields represent the safest return for investors. The 10-year U.S. Treasury yield has fallen from 4.7% in January 2025 to near 4.3% today. When safe yields drop, the gap between bonds and non-yielding assets such as crypto narrows, making coins more appealing in comparison. After yields slid in late 2018 until shortly after the start of their rapid climb back up in October 2021, Bitcoin's price rose by 572%, and XRP's followed, climbing 84% in the tail end of the period. When people have more disposable income, they invest more, and when they have invested in safe assets sufficiently, they move on to investing in riskier ones like Bitcoin or XRP. Paychecks are stretching a bit further after accounting for inflation recently; average hourly earnings in the U.S. rose 1.4% from March 2024 to March 2025. During the economic stimulus of the 2020 to 2021 period, fresh cash on the sidelines helped power Bitcoin's rise. There's no similarly strong stimulus this time around, but that doesn't change the fact that investors with deeper pockets are more likely to devote some of their money to cryptocurrencies like Bitcoin or XRP. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy. 5 Macro Trends Likely to Send Bitcoin and XRP Skyrocketing in 2026 was originally published by The Motley Fool
South China Morning Post
6 hours ago
- Business
- South China Morning Post
Central banks rush to gold as fears of US dollar crisis mount
Why are central banks, including those of China and India, adding gold bullion to their reserves at an almost alarming rate, to the point where gold is now second only to the US dollar as an official reserve asset? It is not for the same reason that others are snatching up the yellow metal, which is to act as a hedge against inflation or stagflation. Central banks have instead joined the gold rush because they fear financial crises occurring, simultaneously and on multiple fronts, and these institutions constitute the first line of defence in dealing with such contingencies. But why gold? Because a crisis of the world's chief reserve asset – the US dollar itself – could be in the offing. Gold has overtaken the euro as the world's second-most-important reserve asset for central banks, driven by record purchases and soaring prices, according to a European Central Bank report published this month. Bullion accounted for 20 per cent of global official reserves last year, outstripping the euro's 16 per cent. Central bank gold holdings are now back to where they were in the 1960s, before gold went out of official fashion. This is no ordinary diversification of central bank reserves. It more closely resembles panic buying – not so much financial funk on the part of central banks as a scramble to stay ahead of anticipated crises in the financial system. It is difficult to fight fire with fire, and so in a situation that could include a bonfire of paper currencies led by the US dollar, only precious metals such as gold could serve as instruments to help douse the blaze. Unlike paper currencies, precious metals do not burn up when the heat is on in financial markets.
Yahoo
a day ago
- Business
- Yahoo
Euro Poised for Best Run Since 2017 as Dollar's Slump Picks Up
(Bloomberg) -- The euro is set for its longest stretch of monthly gains in eight years, boosted by rising confidence in Europe's economic prospects and a hunt for alternatives to the slumping dollar. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Mapping the Architectural History of New York's Chinatown US State Budget Wounds Intensify From Trump, DOGE Policy Shifts The common currency is up more than 3% in June, its sixth month of advances. It climbed to $1.1753 on Friday, the highest level since September 2021. Those gains have come as the dollar falters, with the Bloomberg Dollar Spot Index near its lowest level in more than three years after again dipping this week. The currencies are moving in separate directions on wagers that the Federal Reserve will cut rates at least two times this year while the European Central Bank is coming to the end of its easing run. Money markets are pricing in about 60 basis points of Fed easing by year-end, compared with just 25 basis points from the European Central Bank, and currencies tend to benefit from higher rates. Adding to the outlook for the dollar is speculation the next Fed chair will heed President Donald Trump's calls for aggressive rate cuts. Helen Given, a foreign-exchange trader at Monex Inc., sees the index declining by as much as 9% if Trump names a dovish successor to Jerome Powell this year. It's already down nearly 9% year to date, after declining 1.4% this week. 'The fortunes of the macro US economy for the back half of this year don't look so great,' she said, citing recent data, including a weak reading on gross domestic product. Fed Path The opposing outlooks for the euro and dollar show how currency traders are returning their focus to the Fed's path on rate cuts following a bout of geopolitical risks in the Middle East and worries over the impact of trade tariffs. 'The fleeting support for the greenback, born of geopolitical tensions and its traditional safe-haven appeal, has all but evaporated,' said Antonio Ruggiero, strategist at foreign exchange and global payments firm Convera. 'The euro will continue to benefit from persistent dollar pessimism.' European policymakers have called for steps to boost the euro's global standing amid the shifting landscape. Meanwhile, risk reversals on the dollar index have once again turned negative across the curve, pricing a weaker greenback going forward. A group of non-commercial traders, including asset managers and other speculators, boosted their bets against the dollar in the week through June 17, according to the Commodity Futures Trading Commission's report on Monday. They are now the most bearish on the greenback since August 2023. 'US interest rates can decline more quickly in coming months than in much of the rest of G-10,' wrote strategists at UBS Investment, explaining that it will weigh on the greenback and propel the euro and the yen. They forecast the common currency will reach $1.23 and the yen to trade at 130 per US dollar by year end. The euro is among the best performers against the dollar this year so far, advancing about 13%. Asset managers are the most bullish on the common currency since early 2024, CFTC reported. What Bloomberg Strategists Say... 'European currencies are best placed to transform the dollar's weakness into strength given that the Bank of Japan is dragging its feet on further policy tightening. Even so, the euro's journey higher will be far from linear.' — Ven Ram, Markets Live strategist. Click here for the full piece. On Friday, a report showed that US consumer spending declined in May by the most since the start of the year. The Fed's preferred inflation gauge — the core PCE price index — rose 0.2% on a monthly basis, slightly more than expected. 'Higher PCE readings and weaker personal spending feeds into the stagflation story,' said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co. 'Not a good combo for the dollar.' --With assistance from Mark Cranfield and George Lei. (Recasts with dollar pricing.) America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
a day ago
- Business
- CNBC
Sterling keeps climbing on struggling dollar
The pound was set for its biggest weekly gain against the dollar in nearly four months on Friday and held close to its near four-year high hit the previous day, though that was more due to dollar weakness than sterling strength. The pound was last up 0.14% on the dollar at $1.13745, just off Thursday's top of $1.37701, the highest since late 2021. It was broadly steady on the euro, at 85.24 pence, underlining the fact that the move in the pound against the dollar - referred to as cable by financial markets - has much more to do with the dollar. "The gains in cable reflect mostly this year's weakness in the dollar and the strength of the euro, which has dragged the pound higher due to the limited parameters of the EUR/GBP trading range," Rabobank analysts said in a note. The pound has gained 2.2% against the dollar this week, its most since early March, as the greenback's short-lived gains during the Israel-Iran conflict fade. The main domestic support for the pound this year has come from the Bank of England being slower to cut interest rates than peers, particularly the European Central Bank, as inflation remains sticky. "Core inflation in the UK has basically stopped moving for the past year - hard to say why. BoE officials are quite concerned. That makes it difficult to cut rates and also the economic outlook is not improving," Michael Pfister, FX analyst at Commerzbank, said. Analysts also said they were watching this week's political drama given what Rabobank described as "the overhang of a very large debt/GDP ratio and a UK current account deficit." Prime Minister Keir Starmer this week sharply scaled back planned welfare cuts after more than 100 of his Labour Party lawmakers publicly opposed the reforms, which sought to shave 5 billion pounds ($6.9 billion) per year off a rapidly rising welfare bill.
Business Recorder
a day ago
- Business
- Business Recorder
Sterling keeps climbing on struggling dollar
LONDON: The pound was set for its biggest weekly gain against the dollar in nearly four months on Friday and held close to its near four-year high hit the previous day, though that was more due to dollar weakness than sterling strength. The pound was last up 0.14% on the dollar at $1.13745, just off Thursday's top of $1.37701, the highest since late 2021. It was broadly steady on the euro, at 85.24 pence, underlining the fact that the move in the pound against the dollar - referred to as cable by financial markets - has much more to do with the dollar. 'The gains in cable reflect mostly this year's weakness in the dollar and the strength of the euro, which has dragged the pound higher due to the limited parameters of the EUR/GBP trading range,' Rabobank analysts said in a note. The pound has gained 2.2% against the dollar this week, its most since early March, as the greenback's short-lived gains during the Israel-Iran conflict fade. Dollar hovers near 3-1/2-year low as traders wager on US rate cut The main domestic support for the pound this year has come from the Bank of England being slower to cut interest rates than peers, particularly the European Central Bank, as inflation remains sticky. 'Core inflation in the UK has basically stopped moving for the past year - hard to say why. BoE officials are quite concerned. That makes it difficult to cut rates and also the economic outlook is not improving,' Michael Pfister, FX analyst at Commerzbank, said. Analysts also said they were watching this week's political drama given what Rabobank described as 'the overhang of a very large debt/GDP ratio and a UK current account deficit.' Prime Minister Keir Starmer this week sharply scaled back planned welfare cuts after more than 100 of his Labour Partylawmakers publicly opposed the reforms, which sought to shave 5 billion pounds ($6.9 billion) per year off a rapidly rising welfare bill.
