29.11 - Bitcoin's new record, GBP get a boost
Wednesday is a busy day in financial markets with a lot of new developments. For the first time ever, the crypto giant Bitcoin smashed the $10,000 level. Meanwhile, the USD was little changed against other major currencies. U.S. GDP data will be released later today and will provide some clues about the strength of the economy. Elsewhere, the GBP surged on Brexit positive updates. Here’s the biggest things to know for today.
Bitcoin continued to tear higher on Wednesday, breaking the symbolic $10,000 level overnight after rising more than $2,000 in just four days.
Bitcoin has led the debate as hardcore fans insist that the cryptocurrency has nowhere to go but up, with the upcoming launch of Bitcoin futures paving the way for institutional investors to get into the game.
However, detractors warn that its 1,000% rise this year to a market cap of more than $180 billion, topping blue-chip firms the likes of McDonald’s, IBM or GE is evidence of a bubble just waiting to pop.
Pension Partners crunched the numbers and if bitcoin was to repeat this year’s stellar percentage gain in 2018, it would top a $1.5 trillion market cap, more than the value of any company in the world.
The dollar showed choppy trade around the unchanged mark against major rivals on Wednesday as traders watched developments surrounding U.S. tax reform and maintained a cautious stance as tensions with North Korea resurge.
The prospects for a U.S. tax cut seemed to improve after Senate Republicans pushed through their bill in a partisan committee vote that set up a full vote by the Senate as soon as Thursday.
However, details of the measure remained unsettled and Republican leaders conceded that they have yet to round up the votes needed for passage in the Senate, where they hold a narrow 52-48 majority.
Meanwhile, tensions resurged after North Korea said it had successfully launched a new type of intercontinental ballistic missile that it claimed was capable of reaching the U.S. mainland.
The launch, Pyongyang's first since Sept. 15, came after the U.S. classified North Korea as a country that supported terrorism on Nov. 20. In response to the launch, U.S. President Donald Trump said, "It is a situation that we will handle."
Wednesday’s economic data will be the second estimate of GDP growth for the third quarter released at 13:30 GMT on Wednesday, expected to show an upward revision from 3.0% to 3.2%.
Later on the agenda, October pending home sales will be out at 16:00 GMT, while the Fed’s Beige Book will be released at 19:00 GMT.
Furthermore, markets will pay close attention to outgoing Fed chair Janet Yellen’s testimony on the economy on Wednesday at 15:00 GMT before the U.S. Congress's Joint Economic Committee on Capitol Hill.
In candid remarks last week, Yellen stuck by her prediction that U.S. inflation will soon rebound, but said she is “very uncertain” about this and is open to the possibility that prices could remain low for years to come.
The British Pound traded higher against both the dollar and the euro on Wednesday amid signs that Britain and the European Union are on the brink of a Brexit breakthrough.
According to reports, both parties have agreed to an outline for the amount the UK will pay the EU as part of its departure from the economic bloc. In principle, Britain has agreed to assume liabilities of as much as €100 billion (£87 billion; $119 billion), although the net payment could be much less and will be spread out over time.
Although discussions over the Irish border remain unresolved, the divorce bill was one of the major obstacles placed by the EU before moving on with future trade negotiations.
- by Roger Gain