U.Today – Cryptocurrencies gained strength on the back of gains in stocks at the start of Monday, indicating increased optimism ahead of major central bank decisions.
This week, investors are looking forward to key economic data releases and the Federal Reserve's July meeting, scheduled for this week. The Fed meeting will begin on Tuesday and end on Wednesday, with the announcement of interest rates and the new monetary policy stance.
Rates are expected to remain steady, but investors are watching for signals about when and how many rate cuts may occur this year. They will therefore be closely watching any policy guidance issued by the central bank, as well as the press conference following the meeting with Federal Reserve Chairman Jerome Powell.
On Friday, the personal consumption expenditures (PCE) price index, the Fed's preferred inflation metric, came in as expected. In June, the PCE rose 0.1% from the previous month and 2.5% from a year earlier.
Traders have recently been pricing in a strong possibility that the first interest rate cut will come in September.
While Fed officials have repeatedly stated that they are looking for more evidence that inflation is steadily returning to 2% before cutting rates, Fed Chair Jerome Powell indicated earlier this month that the central bank may not wait until inflation hits this target before cutting rates.
The cryptocurrency market reacts
hit its highest level since mid-June, reaching $69,868 in the first trading session today, as expectations of interest rate cuts by the US Federal Reserve boosted investor sentiment.
At the time of writing, BTC was up 2.65% over the past 24 hours to $69,520. Several cryptocurrencies were also trading in the green, posting gains of between 2% and 4%. Bitcoin’s split gained as much as 15%.
The Fed meeting later this week is likely to set the stage for the start of a rate-cutting cycle, which is seen as favorable for cryptocurrencies; this expectation boosted market sentiment.
The price of bitcoin is down about $4,400 from its all-time high of about $74,000 in March. Capital inflows into U.S.-specific exchange-traded funds have boosted the value of bitcoin this year.
This article was originally published on U.Today
