Bitcoin Faces Downward Pressure as Global Trade Tensions Rise
NEW YORK – October 26, 2023 - Bitcoin is experiencing downward pressure as escalating trade tensions and a decline in global risk appetite drive investors toward safe-haven assets, according to market analysts.The cryptocurrency’s performance is mirroring fluctuations in conventional foreign exchange markets, where currencies sensitive to risk are facing headwinds.
The australian dollar remained stable at 0.6511 US dollars despite Australian unemployment reaching a nearly four-year high in September, reinforcing expectations of potential interest rate reductions. “The more realistic outcome, given the risk of escalating retaliation,” said Joseph Capurso, head of foreign exchange at the Commonwealth Bank of Australia. The Australian currency, typically an indicator of risk appetite, has been subject to sharp swings this week.
Meanwhile, the Chinese yuan rose to its highest level in two weeks against the dollar after the Chinese Central Bank set its strongest daily exchange rate in a year.
in Europe, the euro hit its highest level in a week, rising 0.10% to $1.1656, as investors monitored political developments in France, where Prime Minister Sebastien Lecornu is expected to survive two no-confidence motions. Despite the political uncertainty, French bond markets have remained relatively stable, with investors believing early elections are unlikely. Postponing pension reform until after 2027 has temporarily eased the crisis but complicates efforts to adjust public finances, analysts note.
The Japanese yen briefly reached a one-week high of 150.51 yen to the dollar before settling at 151.11 yen. Japan’s ruling Liberal Democrats are preparing talks with the Innovation Party, possibly influencing the upcoming prime ministerial election. “Regardless of the outcome of the prime ministerial election, markets are likely to expect expansionary fiscal policies,” said Shinichiro Kadota, head of exchange and interest strategy at Barclays Tokyo. Kadota added that Barclays maintains buy positions for the dollar against the yen, anticipating a continued rise, while monitoring the risk of government intervention or a rate hike from the Bank of Japan.
