Bitcoin bounces as the pound plunges: what’s next for global markets?
Last week was all about a modern currency enjoying some big moves – all while a more established one was plunging.
Bitcoin has been grabbing its fair share of headlines in recent months, with the crypto favourite trading above $8,000 last week for the first time since July last year. This served to bring the cryptocurrency faithful back onto social media and rehash the old arguments from the end of 2017 about BTC will hit $100,000 before we all know it.
Regardless of your view on cryptocurrencies, they are certainly an exciting market to trade and, dare I say it, it does feel as if this time could be different. We have seen an actual resilient recovery in Bitcoin rather than the false dawns that seemed to happen so regularly in 2018.
It has not been such a glorious time for sterling. Friday saw it at its worst levels since mid-January, with GBP/USD trading towards 1.2700.
The UK economy is performing better than many of us expected, but the ongoing lack of Brexit progress and instability at the top of government is not doing sentiment any favours here. The pound has now dropped around 5% in the past two months, and the slide over the last week has been relentless.
But there is always the opportunity for surprises: traders will be watching the political fundamentals rather than the economic ones for the rest of the month, and it is certainly starting to look cheap at current levels, so don’t be surprised by a sudden snap back.
Stock markets had an exciting, if ultimately directionless, week. Markets were spooked at the beginning by ongoing talks of trade wards and tariffs.
As the week went on those earlier slides were mostly recovered mostly, but I think it is fair to say that investors have been shaken by the ongoing spat between the US and China. This is likely to dominate their focus for some time to come, so although the recovery for stock markets that has been in place all this year is still intact, I think we can expect a lot more volatility day-to-day until – and if – these differences are ironed out.
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