News of Credit Suisse's largest investors' inability to provide financial assistance revived fears over a banking crisis, this time in Europe. Major global equity indexes came back under immense pressure following Tuesday's relief rally and global bond yields fell sharply amid flight to safety.
USD/CHF gains strong positive traction on Wednesday amid a blowout intraday USD rally. Negative news surrounding Credit Suisse boosts the USD’s global reserve currency status. Bets for at least a 25 bps Fed rate hike in March support prospect for a further upside.
Economics news may get drowned out by the squashed stock market rally in regional banks in pre-market trading. The WSJ reports some of the regionals are falling again as “banking fear returns.” And the European banking sector is in trouble, led by Credit Suisse.
EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
GBP/USD recovered toward 1.2550 after coming in within a touching distance of 1.2500 in the second half of the day after Nonfarm Payrolls came in at 199,000 for November. Despite the recent rebound, the pair remains on track to snap a three-week winning streak.
When the Federal Reserve kept rates unchanged back in November for the second meeting in a row there was still the distinct possibility that the final meeting of 2023 would provide the possibility of one more rate rise to round off the year in line with Fed policymakers dot plot forecasts of 5.6%.
Gold broke below its daily range and declined toward $2,010 with the immediate reaction to the upbeat US November jobs report. Although XAU/USD managed to recover toward $2,020, rising US Treasury bond yields triggered another leg lower.
Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States.
