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Skerdian Meta•Thursday, December 19, 2024•2 min read
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Yesterday the FED delivered a 25 bps rate cut, today we have the BOJ and the BOE which are expected to keep interest rates on hold.
Global financial markets experienced heightened volatility after the FED rate cut. The Federal Reserve’s hawkishness has rattled equities and cryptocurrencies alike, sending BTC close to $100K while commodities such as gold remain under pressure as well. The damage was done by the Dot Plot, which showed fewer rate cuts in 2025
Today’s Market Expectations
Today, the Bank of England is expected to maintain its Bank Rate at 4.75%. The lone dissenter is likely to be Swati Dhingra, known for her dovish stance. Governor Andrew Bailey has pointed to persistently elevated inflation, supported by recent hotter-than-anticipated data. BoE officials appear to favor a gradual path to easing, potentially reducing rates at intervals of three months.
In the U.S., labor market data remains a focal point for investors. Initial Jobless Claims are projected to decline to 229,000 from 240,000 in the prior report, staying within the consistent 200,000–260,000 range observed since 2022. Continuing Claims rose in the last release to 1,886,000 from 1,871,000, but no consensus exists for this week’s update. This trend signals lingering challenges in the labor market, even as conditions remain relatively stable.
Yesterday we had another good day trading forex and other financial markets. We remained long on the USD, expecting a hawkish FED rate cut, which is what the FED presented, sending the USD higher. We opened 7 forex signals in total, ending the day with 6 winning trading signals and 1 losing signal.
Gold Breaks Below the 100 Daily SMA
Gold markets have also been impacted by shifting monetary expectations. Prices dropped $100 last week after failing to breach the $2,725 resistance level, driven by strong U.S. services PMI data and anticipated Federal Reserve rate cuts. After finding support at $2,633, near the 200-day Simple Moving Average, gold prices recovered slightly by $12, though the overall trend remains under pressure.
XAU/USD – Daily Chart
NZD/USD Crashes Down to 0.56
The NZD/USD pair faced a sharp decline, losing over one cent in value yesterday. This drop was driven by a hawkish Federal Reserve rate cut alongside New Zealand’s Q3 GDP contraction of -0.1%, which confirmed the country’s entry into a recession. The exchange rate fell to 0.5620 as selling intensified during the U.S. session, following earlier losses in Asian and European trading.
NZD/USD – Daily Chart
Cryptocurrency Update
Bitcoin Retreats After Climbing Above $108,000
In the cryptocurrency space, Bitcoin saw dramatic volatility, falling 5% today after reaching $108,300 yesterday. The price dropped by $4,800 and is now retreating toward $100,000, marking a notable weekly decline.
BTC/USD – Daily chart
Ethereum Retreats Below the $4,000 Level Again
Ethereum also experienced fluctuations, recovering from a dip below $3,000 to trade near $4,000. However, after Monday’s rally, it failed to maintain gains above the $4,000 level, reflecting persistent market instability. Despite this, Ethereum’s position above $3,500 and its 50-day Simple Moving Average suggests underlying investor confidence remains intact.
ETH/USD – Daily chart
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
