US economic data released on Monday suggested that a recession isn’t imminent. The July ISM Services PMI exceeded economists’ expectations, registering at 51.4% (up from 48.8 in June and matching the forecast of 51.4), indicating sector expansion for the 47th time in 50 months. The inflation gauge within this data also surprised to the upside, further easing recession concerns.
Also, Federal Reserve officials played a key role in calming the markets with Fed San Francisco President Mary Daly saying it was “extremely important” to prevent the labor market tipping into a downturn. Daly said her mind was open to cutting interest rates as necessary and policy needed to be proactive.
Crypto Tracker
Traders are now anticipating a likelihood of higher rate cuts by the Federal Reserve. According to the CME Group’s FedWatch Tool, there is a 71% chance that the Fed will reduce rates by 50 basis points at its next policy meeting in September, and a 29% chance of a 25 basis-point cut.
As of 12:35 pm IST, Bitcoin was trading 9% higher at $56,034, while Ethereum rose 9.2% to $2,526.
“The global crypto market is showing resilience in the face of recent volatility,” said Shivam Thakral, CEO of BuyUcoin. “This recovery indicates that cryptocurrencies are finding support at higher levels. As the market faces challenges, maintaining a long-term perspective is crucial.”Echoing this sentiment, Avinash Shekhar, Co-Founder & CEO of Pi42, noted, “Pi42 witnessed a surge in trading activity as many investors took advantage of the dip to buy.”
In yesterday’s trade, Bitcoin and other top crypto tokens plunged due to fears of a potential U.S. recession, triggered by disappointing economic data. The U.S. Labor Department reported a significantly weaker-than-expected job growth in July, with only 114,000 nonfarm payrolls added, well below the forecast of 175,000 and far short of the 200,000 needed to keep up with population growth. The unemployment rate also rose to 4.3%, approaching a three-year high.
The sell-off was further exacerbated by the Bank of Japan’s decision to raise interest rates to 0.25% and reduce bond purchases, which led to an appreciation of the yen and forced investors to unwind their positions.
Geopolitical tensions also weighed on market sentiment, with growing concerns over potential attacks on Israel by Iran and its regional allies.
In addition to Bitcoin and Ether, altcoins and meme coins also surged in today’s trade. BNB gained 12%, Solana rose 14%, XRP increased by 9%, Dogecoin by 10%, Cardano by 8%, and Shiba Inu by 15%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)