MARKET UPDATE

Asia FX cools as Fed help stall dollar losses.

Most Asian currencies moved little on Wednesday, while the dollar stemmed recent declines after the minutes of the Federal Reserve’s late-October meeting reiterated the bank’s outlook on higher-for-longer interest rates.

Regional currencies saw a measure of profit taking after a strong run-up in the past two sessions, as markets priced in bets that the Fed was done raising interest rates.

But Tuesday’s minutes cast some doubt over when the central bank will begin trimming interest rates, given that most Fed officials have also repeatedly signalled higher for longer rates.

The Chinese yuan- which was one of the best-performing Asian units this week, traded sideways at 7.1386 to the dollar. The currency was boosted by a series of stronger-than-expected midpoint fixes from the People’s Bank of China, as well as reports that Beijing was planning to roll out more stimulus measures, particularly for the beleaguered property sector.

 

Binance’s Zhao pleads guilty.

Binance chief Changpeng Zhao stepped down and pleaded guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the world’s largest crypto exchange, prosecutors said on Tuesday.

The deal, which will see Zhao personally pay $50 million, was described by prosecutors as one of the largest corporate penalties in U.S. history. It is another blow to the crypto industry that has been beset by investigations and comes on the heels of the recent fraud conviction of FTX founder Sam Bankman-Fried.

But several legal experts said it was a good outcome for Zhao, leaving his vast wealth intact and allowing him to retain his stake in Binance, the exchange he founded in 2017.

Binance broke U.S. anti-money laundering and sanctions laws and failed to report more than 100,000 suspicious transactions with organizations the U.S. described as terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, authorities said.

The exchange also never reported transactions with websites devoted to selling child sexual abuse materials and was one of the largest recipients of ransomware proceeds,

 

Gold prices touch $2,000.

Gold prices steadied in Asian trade on Wednesday after briefly touching key highs as the prospect of no more rate hikes by the Federal Reserve spurred continued flows into the yellow metal.

But a rally in gold prices now appeared to have cooled, as the minutes of the Fed’s late-October meeting, released on Tuesday, showed the bank sticking to its higher-for-longer outlook on interest rates.

While markets remained convinced that the Fed will raise rates no further, the Fed minutes spurred some doubts over when the central bank will begin trimming rates. CME Group’s Fedwatch tool showed traders reconsidering expectations of a March 2024 rate cut.

Spot gold was flat at $1,999.39 an ounce, while gold futures expiring in December steadied at $2,000.65 an ounce by 00:21 ET (05:21 GMT). Futures had risen as high as $2,009.80 an ounce on Tuesday, before cutting some gains after the Fed minutes.

Fed rate cut outlook uncertain as minutes reiterate higher-for-longer outlook

Gold saw a series of strong gains in recent sessions, as weak U.S. labor and inflation data spurred increased bets that the Fed was done raising interest rates.

But the outlook for the yellow metal remained uncertain, especially given that the Fed likely plans to keep rates higher for longer. The central bank has signalled that rates will remain above 5% until at least end-2024.

 

 

 

 

 

 

 

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