WASHINGTON (dpa-AFX) - With the Federal Reserve's monetary policy decision less than a week away, the updates to inflation for August have turned global market sentiment volatile. As markets digested the unexpected rise in monthly core inflation, rate hike expectations from the Fed have increased dramatically. Cryptocurrencies, though volatile, are trading firm above the flatline. The overnight plunge in crude oil prices diminished the market's fears about the Fed's likely action on September 16.
Bitcoin traded between $76,296.50 and $79,695.70 during the past 24 hours. Ethereum ranged between $2,438.53 and $2,653.07 during the same period.
Data released by the U.S. Bureau of Labor Statistics on Friday morning showed headline annual inflation remaining steady, as expected at 3.4 percent. The core component thereof edged down to 2.4 percent from 2.5 percent in July, in line with market expectations. On a month-on-month basis, inflation increased to 0.4 percent from 0.1 percent in July, but exactly as anticipated by the markets. However, the unexpected rise in its core component that excludes the volatile food and energy prices to 0.3 percent spooked market sentiment. Markets had expected it to remain steady at 0.2 percent.
The sticky core inflation caused markets to dramatically tone down expectations of a pause by the Federal Reserve on Wednesday. The CME FedWatch tool that tracks the expectations of interest rate traders now shows the likelihood of a pause by the Fed on September 16 at 14.4 percent versus 27.6 percent a day ago, 40.6 percent a week ago and 51.6 percent a month ago.
Losses were limited on account of the plunge in crude oil prices attributed to the diplomatic efforts to ease tensions around Strait of Hormuz. Both Brent Oil and WTI crude oil are trading with overnight losses of more than 2 percent.
Amidst the mixed triggers, sovereign bond yields in the U.S. have moved in a mixed fashion. Long dated thirty-year bonds have eased 0.58 percent overnight while ten-year bonds have softened 0.16 percent. Yields on the shorter end of the curve however spiked. Five-year bond yields have rallied 0.17 percent whereas two-year bond yields have jumped 0.86 percent.
Amidst the renewed rate hike fears, crypto markets have priced in the movements in the U.S. dollar also. The six-currency Dollar Index which measures the U.S. Dollar's strength against a basket of 6 currencies is currently trading at 98.97, implying an overnight decline of 0.08 percent.
Overall cryptocurrency market capitalization is currently at $2.65 trillion while the 24-hour trading volume stood at $86.8 billion.
Bitcoin (BTC), the largest cryptocurrency is currently trading 2 percent higher on an overnight basis at $79,139.40. The leading cryptocurrency has shed half percent over the course of the past week and is still saddled with year-to-date losses of 9.7 percent.
Bitcoin Spot ETF products in the U.S. witnessed net outflows increasing to $283 million on Thursday from $120 million on Wednesday. ARK 21Shares Bitcoin ETF (ARKB) topped with net outflows of $164 million.
Bitcoin is continuing in the 13th position in the global ranking of all assets as per market capitalization published by companiesmarketcap.com. The leading cryptocurrency is positioned between 12th ranked Meta Platforms and 14th ranked Tesla.
Ethereum (ETH) is trading 6.9 percent higher at $2,614.55. The leading alternate coin has added 5.9 percent over the course of the past week.
Ethereum Spot ETF products in the U.S. witnessed net outflows of $30 million on Thursday versus net inflows of $35 million on Wednesday. Fidelity Ethereum Fund (FETH) topped with net outflows of $25 million.
Ethereum rallied 4 notches to the 59th position in the global ranking of all assets as per market capitalization published by companiesmarketcap.com.
4th ranked BNB (BNB) gained 3.3 percent overnight resulting in price increasing to $733.70.
5th ranked XRP (XRP), a payments-focused cryptocurrency added 2.5 percent overnight and is currently trading at $1.40. Weekly losses are around 1 percent.
The price of 7th ranked Solana (SOL) increased 3.7 percent overnight to $103.83. TRON (TRX) ranked 8th overall is currently trading 0.5 percent lower at $0.3367.
9th ranked Hyperliquid (HYPE) is trading 2.4 percent higher on an overnight basis, at $82.99.
Zcash (ZEC) positioned as 10th rank overall gained 2 percent overnight to trade at $1,202.39.
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