Chinese Renminbi Hits Lowest Level In 15 Years, Transfer Of UK PM Status, EU Stocks Supported By Potentially Dovish Fed, Bitcoin Forecast
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Summary:
- The value of China's currency has decreased 13% so far this year.
- U.S. economy shrank for a fourth consecutive month.
- Chancellor Rishi Sunak was named the next prime minister.
- Bitcoins new price objective set at $30,000.
The Renminbi is crashing
The value of the Chinese yuan against the dollar has fallen to its lowest level since 2007 as worries over President Xi Jinping's choice of a more hardline leadership team and the weakening economy moved from stock markets to currency markets. A growing interest rate disparity with the US has already hurt the renminbi this year; on Tuesday, it dropped as much as 0.6% to Rmb7.3084 per dollar. The People's Bank of China lowered the midpoint of the currency's trading band to its lowest level since the world financial crisis, which caused the decline.
The value of China's currency has decreased 13% so far this year. The decline on Tuesday came after a sell-off in Chinese stocks that affected markets around the world this week, with the Hang Seng China Enterprises index falling more than 7% on Monday and the Nasdaq Golden Dragons index of major technology stocks falling more than 14%.
China’s renminbi has hit its weakest level against the dollar since 2007 following concerns over President Xi Jinping’s appointment of a harder line leadership team and a struggling economy https://t.co/F96TYsSrcE pic.twitter.com/8niDscsIu5
— Financial Times (@FinancialTimes) October 25, 2022
Rishi Sunak takes over from Truss
This week saw a solid start for the pound, but it was unable to continue its upward trend when former chancellor Rishi Sunak was named the next prime minister-designate after the Conservative Party leadership contest, which will have a major impact on the pound and the UK economy going forward. After former Prime Minister Boris Johnson withdrew from the race for the position of Prime Minister, leaving former Chancellor Rishi Sunak on course for a coronation that is expected to produce the UK's fifth Prime Minister in the past six years on Tuesday, sterling increased against most major currencies to start the new week.
The Pound, however, quickly lost its early gains as newly-elected Prime Minister Rishi Sunak warned of impending economic hardship and difficult choices involving the public finances in a speech to parliament.
Follow the latest developments as Rishi Sunak takes over from Liz Truss as UK prime minister https://t.co/pEjylJrgRO
— Bloomberg (@business) October 25, 2022
EU Stocks supported by potentially dovish fed
While anxiety over China's economy continued to weigh on Asian markets, European stocks climbed in early trade on Tuesday as investors took heart from indications that the U.S. Federal Reserve could scale back its rate increases. Data released on Monday revealed that the U.S. economy shrank for a fourth consecutive month. This suggests that the Fed's rate hikes have weakened the economy, which in turn has fueled optimism that the central bank may start to moderate the pace of the increases.
The projected Fed rate peak has decreased slightly from over 5% early last week to around 4.93%.
The European stock market's mood was also helped by certain profit results that exceeded forecasts, with Swiss bank UBS (UBSG.S) among those that did so. However, the biggest bank in Europe, HSBC, announced a 42% decline in third-quarter profit, which caused a 4% decline in its share price (.HSBA.L).
European stocks up as investors see signs Fed could slow rate rises https://t.co/a5VwuwKWFZ pic.twitter.com/ONhjztqvLs
— Reuters (@Reuters) October 25, 2022
Bitcoin Forecast revised upwards to $30,000
In the coming month, Bitcoin "will break out dramatically," with a price objective of $30,000.
Michal van de Poppe, the founder and CEO of the trading company Eight, made that most recent forecast. On October 25, Van de Poppe tweeted his support for the analysts who are predicting a rise in the price of bitcoin. BTC/USD is now characterized by a notable lack of volatility, but there are growing indications that the sideways trend is about to undergo a significant change.
Popular analyst TechDev and others have confirmed that Bitcoin's Bollinger Bands versus the Nasdaq are the tightest in history, which all but guarantees an explosive move to come.
“Market looking good for a last leg up. Higher highs and higher lows on ltf and demand being moved up,” he tweeted.
Analyst puts Bitcoin price at $30K next month with breakout due - https://t.co/IKtVBdXcef
— Investing.com News (@newsinvesting) October 25, 2022
Sources: twitter.com, cointelegraph.com, reuters.com, ft.com, investing.com, poundsterlinglive.com
