A pretty mundane start to the week so far. The Dollar Currency Index is currently aiming for its third consecutive daily close in the red and has fallen below 100 as of this morning. A number of elements are weighing on the Greenback, among them the downgrade of the United States’ credit rating from AAA to AA1 by Moody’s last Friday. The change in score has had limited impact, but adds to the narrative of reduced confidence in the US to service its debt. The other two major credit rating agencies, Fitch Group and S&P Global Ratings, lowered their scores in 2023 and 2011 respectively. The latest change by Moody’s puts all three agencies on the same page. A weaker Dollar has helped precious metals over the last couple of days, pushing gold back over $3,300.
Several Fed board members have spoken this week, unanimously voicing their concerns about the outlook of the US economy and labour market. While nothing new, the comments will do nothing to instil confidence in the mind of the average investor during these uncertain times. Little of substance has materialised on the trade front over the last few days, although attentions are understandably directed towards the G7 meeting currently taking place in Canada. Restoring global stability and growth is one of the main focuses of the gathering, although Ukraine and sanctions against Russia also occupy much of the agenda.
In crypto meanwhile, a bill relating to the GENIUS act passed the US Senate as expected on Monday, paving the way for a genuine regulatory framework for stablecoins. Stablecoins have experienced staggering growth since their inception in 2014 and now account for around $250 billion in market cap. Despite this, there has been very little progress on the regulation front up until now – a criticism valid for cryptocurrencies in general. Greater optimism in the fledgling industry has pushed Bitcoin up to $107k this week.
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