U.S Dollar Wait On FOMC Rate Decision

Traders have been anxiously awaiting the September Federal Open Market Committee rate decision since the Fed first talked about tapering at the July meeting.

Meeting minutes from the July FOMC meeting showed that most members felt it would be appropriate to start reducing bond purchases by the end of the year. As a result, September becomes a key date.

Dollar prices were relatively firm on Wednesday as currency experts predict the greenback could struggle to advance as investor sentiment improves in light of the improved pandemic situation.

As investors contend with economic headwinds, including those in China, the greenback has continued to rise in value. The dollar is likely to slip lower in the near term, however, as pandemic uncertainties dissipate.

Against a trade-weighted basket of six major currencies, the U.S. dollar index got over 93.2 index points.

As a strong dollar theme is taking shape, prices of the US Dollar Index (DXY) are rising. Similar themes have developed, but then came crashing down. 93.72 is the yearly high, and a top-side trendline from the March high points to that level.

When resistance is rejected, we will likely see more volatile price action and a potential set-up for a trend reversal in the near term.

It is possible that the environment is changing towards higher volatility, and the stock market is already showing signs of weakening, so we could see a sustainable breakout to new yearly highs.

At the end of the Federal Reserve’s meeting on Wednesday, there shouldn’t be any major policy changes announced, but market jitters may result from Fed signals that one will be announced soon.

Prior to the end of the year, the Fed is expected to start scaling back its extraordinary monetary support. Initially, the Fed will slow its asset purchase program and then increase rates later.

Still, the vultures remain in flight as Treasury Secretary Janet Yellen warned that if Congress doesn’t raise the debt ceiling before the United States faces a “widespread economic catastrophe.” Paying Treasury bills is impossible due to insufficient cash.

Gold Bugs Rally On Evergrande Group’s Ongoing Debt Crisis

Following nearly 83 basis points of gains, gold was down slightly lower in London on Tuesday morning.

However, investors were cautious ahead of the Federal Reserve’s policy decision and China’s ongoing debt crisis, which caused investors to take a risk-averse stance.

During the time this report was written, yellow metal futures fell by 0.08% to $1,762 an ounce.

Buying yellow metal on Monday was a two-fold benefit. Gold is a safe-haven asset, so it appeals to investors. When economic conditions are bad, traders traditionally look to gold as a store of value.

In addition, there is a correlation with bond yields. As Treasury yields fell – a result of safe-haven flows – gold had a lower opportunity cost to be held.

Gold’s appeal appears to be strengthened by current market conditions; however, its fundamentals remain strong.  Nevertheless, there are rumors’ Beijing may offer Evergrande a rescue package this week.

Market confidence would likely rise as a result, but gold prices would likely fall. Given that the developer owes over $300 billion, the payment deadline still remains in doubt.

Meanwhile, investors are awaiting the Fed’s policy announcement later today, which will include clues about how soon they can expect asset tapering and interest rate rises.

Isabel Schnabel, a member of the European Central Bank (ECB) board, said on Monday that the volume of bond purchases is becoming “less important” as the economy improves and the money-printing scheme is used to guide rate expectations.

Wednesday and Thursday the Banks of England and Japan will each release their respective policy decisions.

The price of silver climbed 0.1% after reaching a more-than-nine-month low of $22.01 in the previous session. Platinum rose 0.5% to $915.05 after hitting a 10-month low on Monday, while palladium rose 0.6% to $1,896.30 after hitting its lowest level since mid last year.

Sell-Offs in Crypto Market, Strong Dollar Tames Investors Appetite

The flagship crypto attempted to break the $48.5k resistance level again, but the rising dollar dampened investor sentiments.

Investors bracing for a further step towards tapering from the Federal Reserve this week pushed safe-haven currencies to a month-high in London trading on Monday as looming heavy sell-offs in riskier assets added extra nerves to a cautious mood.

Traders will be watching to see if the Fed finds the U.S. economy strong enough to start reducing the massive amounts of monetary support it has provided during the pandemic, though an announcement is likely to be delayed until the November or December meetings.

In addition to rising 0.1% to 93.356, the dollar index reached its highest level since Aug. 23.

At $2.02 trillion, the crypto market’s valuation currently stands at 5.63% lower than the previous day’s value. Bitcoin is currently trading for $45k

It was clear that Bitcoin had broken below the $48,000 level and the 100 hourly simple moving average. As seen on the hourly chart, the price failed a bullish trend line near $48,000.

Before the price declined below $46k, the price formed a swing high near $48,323.

Data from Bybt shows that 137,569 traders have been liquidated as of the date of writing. Liquidation order worth $7.17 million occurred on Bybit-BTC.

At present, $45k support is being protected by the bulls. There is now a consolidation of losses near a low that formed near that level.

Under a downside break below the $46,200 level, the $45,000 level or even $43,800 could be reached

In spite of crypto’s decentralized nature, it’s important to note that its volatility is not isolated. A crypto market’s course is determined by this factor. Bitcoin’s fluctuations affect the prices of most crypto.

Tapering Sentiments Boost U.S Dollar To A Month High

A fragile mood started off the week with the greenback strong on the first trading session, while worries about a financial catastrophe at indebted developer China Evergrande further contributed to weakness.

The euro fell slightly to $1.1721 in thin trading due to the holiday season in Japan and China, marking its weakest week in a month.

There is a bit of support for safe haven currency from the expectation of imminent Fed asset purchase cuts in addition to caution as equity markets begin to sway. Everyone is watching for the Fed to signal its tapering intentions.

In order to assess how USD is performing against a basket of currencies used by US trade partners, traders use US Dollar Index, or DXY.

In case of a strengthening dollar against these currencies, the index will rise, whereas a weakening dollar against these currencies will cause it to fall.

A month-high of 93.263 was seen for the U.S. dollar index. Dollar/yen exchanged hands at 110.01.

While traders are mostly focused on the Fed during this week, there are also central bank meetings in Japan, Switzerland, Sweden, Norway, the United Kingdom, Indonesia, the Philippines, Taiwan, Brazil, South Africa, Turkey and Hungary.

Wednesday marked the end of its two-day meeting, and markets expect that the Fed will continue with its extensive plans to taper this year but won’t provide specifics for at least a month.

However, the rate rise in the 10-year Treasury yield for the fourth week in a row last week suggests either a hawkish surprise is coming, or that inflation expectations could shift to showing hikes as soon as 2022, both of which would help the dollar.

Changing just two Fed members’ minds would translate into median projections reflecting a hike next year in the “dot plot”.

Some market pundits predict there will be at least one interest rate rise next year after forecasting no changes in interest rates this year. In addition, two hikes are now anticipated for 2023 – that number could easily rise to three as well.

With the exception of the Bank of England, other major central banks are expected to leave policy settings unchanged, but traders see potential gains in the currency if the central bank adopts a more hawkish tone or more members call for a tapering of asset purchases.

U.S Dollar Propels High On Strong Retail Data

As a result of better-than-forecast retail sales data released recently, the greenback reached three-week peaks on Friday, boosting expectations for the Federal Reserve to reduce asset purchases before the end of the year.

US retail sales unexpectedly rose 0.7% in August despite expectations of a 0.8% decline, data showed on Thursday, fueling speculation about a Fed taper this year. The sentiment of business owners has also improved significantly.

As for the Michigan consumer sentiment survey for September, it rose to 71 from 70.3 last month but did not reach the levels of the Empire States and Philadelphia Fed manufacturing surveys.

US dollar demand has been awakened by expectations of a Fed taper announcement and softer risk sentiment.

This is the highest level since the third week of August for the dollar index used basically to measure how the greenback is doing against six major currencies. At last check, it was up 0.4% at 93.207 index points.

The DXY index at the end of the week gives back a part of its gains after hitting new monthly highs.

As a result, and looking at the broader outlook, the constructive stance is still present on the dollar, which is currently trading at 91.41, above its 200-day Simple Moving Average

The dollar index surged by 0.6% for the week, its biggest weekly percentage gain since mid-August.

Fed representatives are expected to talk about reducing monthly bond purchases at a meeting next week and tie any actual change in monetary policy to the growth of U.S. jobs.

In light of growing cyclical inflationary pressures, the new economic projections may offer some insight into the FOMC’s reaction function.

A number of market commentators remain convinced that inflation will remain high in the U.S. for an extended period of time, which will support higher yields in the U.S. and a strengthened dollar

Africa Is 3rd Fastest Growing Crypto Economy

According to Chainalysis, a digital analytics firm, between July 2020 and June 2021, Africa received $105.6 billion worth of crypto assets.

Additionally, the report states that Africa has experienced the highest adoption rates in the world in the areas of Kenya, Nigeria, South Africa, and Tanzania in a year in which the market for digital currencies grew by over 1,200%.

Furthermore, these countries also rank among the top 20 in Chainalysis’s Global Crypto Adoption Index.

Besides having the third-fastest growing crypto economy, Africa has a larger proportion of its transactions made up of retail-sized transfers than any other region, at just over 7%, compared to the global average of 5.5%.

This report analyses peer-to-peer (P2P) transactions and platforms were critically because regulations such as those in Nigeria and Kenya have made it difficult for customers to send money from their bank accounts directly to cryptocurrency businesses on these platforms.

Consequently, these customers have turned to P2P transactions as a way to bypass laws, as they are non-custodial and let customers trade cash for cryptocurrency among themselves.

The CEO and founder of Nigeria’s first cryptocurrency community hub, CBHUB, Addeji Owonibi, discussed the changes in Nigeria’s cryptocurrency economy after its central bank prohibited banks from participating in cryptocurrency transactions.

“The most popular platform used to be Binance, but has now changed to P2P platforms like Paxful and Remitano after the central bank’s sanction,” he explained. Owonibi, however, claims that most P2P activity takes place over informal group chats via messaging apps as opposed to conventional platforms.

Whatsapp and Telegram are the most popular platforms for informal P2P trading in Nigeria. Several millions of dollars have been transacted with these groups of young people and businessmen.

African cryptocurrency exchanges have continued to grow in popularity in the last year, according to the report. According to their transaction volumes, LocalBitcoins and Paxful are among the world’s top P2P platforms.

Nigeria has been leading the charge as it accounts for the majority of transactions. According to UsefulTulips, Nigeria has surpassed $300 million for P2P trading volume on these two platforms year-to-date.

The study noted that African cryptocurrency users use P2P platforms at a higher rate than any other region, accounting for 1.2% of all African transaction volume and 2.6% of all Bitcoin activity.

Paxful’s COO and co-founder, Artur Schaback, stated in the report that his platform has grown 57% in Nigeria over the last year and 300% in Kenya. According to him,

“Many people in these frontier markets use P2P rather than sending money from their bank accounts to a centralized exchange because they can’t send money from their bank accounts to an exchange. The crypto industry is gaining user-friendly products so more people can get involved in the crypto economy and realize how convenient, inexpensive, and fast crypto is.”

According to the report, cryptocurrencies are used by many Africans for international commercial transactions.

It can be hard to send enough fiat currency to China to complete your purchase if you’re working with a Chinese partner to import goods to sell in Nigeria or Kenya,” Artur Schaback confirmed this. The easiest way to send bitcoin is usually just to go to a P2P exchange, buy Bitcoin locally and then send it.”

Oil Bulls’ Morale High On Supply Squeeze

Government data showed the U.S. crude inventories have shrunk more than expected, and demand for oil may be higher as vaccination campaigns expand. Prices rose over $2 a barrel on Wednesday.

Crude oil stocks in the world’s most powerful economy fell to their lowest level since September 2019, U.S. Several refineries and offshore drilling rigs were shut down in late August due to Hurricane Ida, according to the Energy Information Administration.

Moreover, as the price moves organized inside the bullish channel on the chart, getting continuous support from the Exponential Moving Average 50, we expect to reach new gains of up to 75.00 as the crude oil price approaches 73.30 level today.

At one point during the session, Brent hit a contract at an outright high of $76 a barrel.

For the short and medium-term, the bullish trend will remain dominant, and it is vital to maintain $72.50 a barrel in order to achieve the suggested targets.

Traders are expecting today’s trading range to be between $72 resistance and $74.50 support.

In the aftermath of Hurricane Ida, oil production in the Gulf of Mexico is still struggling to fully resume as of late August

As expected, despite declining inventories of crude oil and distillate last week, gasoline stocks also drifted lower, but not as much as analysts anticipated.

As a result, crude stockpiles fell by 6.4 million barrels last week, whereas analysts anticipated a 3.5-million-barrel drop.

In Texas, refineries are operating organically despite Tropical Storm Nicholas’ slow passage across the Gulf Coast yesterday.

Several refineries on the Gulf Coast were knocked offline by Ida two weeks ago.

In addition to price support, the International Energy Agency (IEA) projected that vaccine roll-outs will contribute to recovery after a three-month decline in global oil demand caused by the spread of the Delta variant and re-imposed pandemic restrictions

Roller-Coaster Scenario With U.S. Dollar

The greenback rose slightly in London’s trading session on Wednesday morning. In reaction to the latest inflation data, the Fed had doubts about the tapering of assets that will commence in 2021, thus keeping the U.S. currency within recent ranges.

U.S. Dollar Index, which measures how strong the dollar is against a basket of currencies, rose 0.04% to 92.648 as of the time of writing.

As a result, USD/CNY rose by 0.08% to 6.4433. China’s latest economic data earlier revealed that industrial production in August grew at a slower pace than expected, at 5.3%. The fixed-asset investment was up 8.9% year-to-year. 2.5% growth was sighted in retail sales.

During the week, the dollar traded in a range of 92.3 to 92.9 as some central bank officials urged the central bank to begin asset tapering by the end of 2021.

The U.S. consumer price index (CPI) rose 4% over the past year and 0.1% over the previous month in August, according to data released on Tuesday. Also reflected in the data were annual increases of 5.3% and monthly increases of 0.3%.

Despite the softer print, the Fed appears to have no need to taper in September. But November or December now seems a better guess for tapering this year.

Next week’s Fed policy decision is expected to provide more clues regarding the timing of the current cycle.

According to the ECB, normalizing monetary policy is not an immediate priority, as it states that the Pandemic emergency purchase program will operate “with a total envelope of €1,850 billion at least until the end of March 2022” and until the Federal Open Market Committee (FOMC) gauges the end of the Coronavirus crisis phase, with the Euro currency, might suffer ahead of the FOMC’s September 22 interest rate decision as Chairman Jerome Powell and Co. adjust their strategy.

A further decline in the exchange rate may fuel the recent flip in retail sentiment, similar to what we saw earlier this year. Until then, speculation surrounding the ECB and FOMC may swing the EUR/USD as both central banks maintain a result-based monetary policy approach.

Gold Bugs Eye Inflation Data

While investors waited for inflation data in the U.S. that might affect when the Fed begins reducing stimulus, gold was in demand.

Traders are nervous about that question because it will determine the fate of the Federal Reserve’s bond-buying program. Consumer Price Index statistics will be released by the US on Tuesday and ranges will remain narrow as tensions continue to mount.

For a fourth month, the consumer price index is anticipated to show 5% or higher inflation on an annual basis. As a result of persistent supply chain disruptions, producer price indexes for final demand rose to a new series high last week.

Gold traders are weighing the risks related to the delta virus variant and rising inflation as the price of gold dips below $1,800 an ounce. Expectations for when the Fed might start tapering bond purchases might shift closer to November as consumer prices come in hotter-than-expected.

It has support across all of the Fibonacci levels of 38.2% for one day, 23.6% for one-week, Simple Moving Average 100 on the hourly chart, among others, at $1,794 an ounce.

The one-day Bollinger band and the Fibonacci 38.2% one-week meet at $1,801 an ounce, providing substantial resistance.

On a longer timescale, the long-term target is $1,815, an ounce which is the intersection of the Pivot R3 one-day and the 100-day SMA.

A downside target of $1,778, on a juncture that includes the Fibonacci 61.8% one-day and the S2 of the Price Pivot, is a potential target for bears.

Inflation reports should provide some insight on whether inflation is temporary, which may explain how gold prices have remained steady.

As a result of the delta variant shock to supply chains, bullion may fall around the time of the CPI data, although it will likely be on the upside surprise side of the Consumer Price Index.

 Crude Oil Propels High, Following Effect Of Hurricane Ida

On Monday, oil prices rose for a second session as the market benefited from concerns over shut-downs in the United States, the world’s largest producer, following Hurricane Ida.

In the early hours of Monday, Brent crude prices increased by nearly a percent to $73.59 a barrel, while West Texas Intermediate (WTI) crude prices also rose by 1%, to $70.38. Earlier in the day, both markets reached their highest levels since Sept. 3.

Brent’s prompt time spread increased to 67 cents a barrel in backwardation, up from 60 cents last week. This is a bullish pattern, with prices on the near-term trading above those on the longer-term.

The U.S Gulf of Mexico has been shut off to offshore oil production for around three-quarters of a year, or roughly 1.4 million barrels per day, the amount of oil production Nigeria produces as an OPEC member.

From the impact of Hurricane Ida, refiners are recovering faster than oil producers, reversing the trend from past storms. There was a slight increase in refinery output on Friday after most of the storm-impacted refineries reopened.

Despite damages to offshore facilities caused by Hurricane Ida, Royal Dutch Shell Plc cancelled some export cargoes on Thursday, indicating continued energy losses.

Energy service provider Baker Hughes reported an increase in rigs operating in the United States last week, possibly indicating an increase in production.

Besides the impact of Ida, the market will be closely watching how the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) intend to update oil demand forecasts this week as Coronavirus cases continue to rise.

In the short term, financial markets need clarity about the virus’ effects, and until that happens, most assets, including oil, might drift sideways.

China’s plan to release oil from its strategic reserves poses supply risks, but fresh talks on a broader nuclear agreement were raised after the Iranian officials and the atomic watchdog have resolved an issue regarding monitoring equipment that has been overdue for maintenance.

Inflation Report May Decide Dollar Outlook

On Monday morning in London, the dollar continued to rise from the previous week. The U.S. remains a source of caution for investors. Despite an increase in COVID-19 cases worldwide, the Federal Reserve is beginning asset tapering.

As of this writing, the U.S Dollar Index, which measures the dollar’s performance in relation to other currencies, increased by 0.10% to 92.668. The contract for December 21 was rolled over on September 12.

Most of the losses that the Dollar suffered after the US payroll report for August was weaker than expected, have been recovered.

The opening price today is 92.65. The FOMC meeting is just around the corner, and market participants anticipate clear language from officials about the taper program.

Despite holding steady at 5.4% for two consecutive months, the headline reading for the US CPI is projected to slip to 5.3% in August, while the core rate is projected to narrow for the second consecutive month.

A slowdown in price growth could cause the US Dollar to lose strength, since the Federal Open Market Committee (FOMC) acknowledges that “the economy has not yet achieved its broad-based and inclusive employment objective,” so the monetary policy may continue as it is, with Chairman Jerome Powell insisting that “there is much more ground to cover.”

A rising US Dollar may be triggered by signs of sticky inflation that put pressure on the Federal Open Market Committee to normalize monetary policy sooner rather than later, but it remains to be seen whether Fed officials will change the Summary of Economic Projections, given the fact that “some participants cited lingering supply disruptions and labor shortages as downside risks to inflation.”

That said, as the Fed enters its blackout period from the media, fresh developments coming out of the US economy could influence the Greenback, however, as it seems to have reversed course just ahead of the August low (91.82), the (DXY) could look at further gains.

For the years 2022 and 2023, I predict inflation to begin falling back to 2% over the course of this year and end at 4% this year.

I’d like to start the tapering process as soon as possible so that we can complete the tapering process before the rate increase is necessary.

  Gold Bugs Suffer Exhaustion Amid Rebounding Greenback

Short-term losses for the precious metal gave way to dismay as the dollar rebounded as talk of a Federal Reserve stimulus taper gave way to euphoria for longs following the dismal jobs report for August.

New York’s Comex closed down $7.90 to settle at $1,792 an ounce. This is the largest decline since July 29. The week ended with a drop of 2.3%. Comex gold also lost for the first time since the end of July.

As inflationary pressure in an economy trying to get out of the shackles of the Coronavirus pandemic grew unrelentingly, Friday’s drop in gold was partly driven by August producer price increases of 8.3 percent, the most in over a decade.

The timing of reining in central bank stimulus and raising interest rates has been hotly debated in recent months, as economic recovery conflicted with the emergence of a resurgent Coronavirus variant, Delta. Although economists’ estimates of U.S. job growth for August were 70% below their targets, there was a significant weakness in the argument for tapering.

The next announcement from the Federal Reserve will most likely influence gold traders. A meeting of the Federal Open Market Committee (FOMC) is also scheduled for September 21-22.

A mixed global economic backdrop continues to put downward pressure on gold prices below the $1,800 mark. Precious metal gains are restrained by the strength of the dollar.

Following the European Central Bank’s (ECB) decision to keep key rates unchanged and to dim some of its massive emergency pandemic support, investor sentiment took an axing.

The steep decline in prices was capped by the drop in US Treasury yields. In addition, the rapid spread of the Coronavirus delta variant and its impact on the global economy continue to lend support to the recovery near the lower levels.

It is still a struggle between bulls and bears around $1,780 an ounce, and analysts believe that if COVID-19 Delta continues to ravage the world, gold will surge toward $1,900 an ounce.

Defi Market Was Influenced By Institutional Investors in Q2

Increasing institutional investment footprints in the crypto market segment has been a common theme in the decentralized finance market (DeFi).

Institutional investors played a major role in the adoption of blockchain in Q2 2021, according to blockchain intelligence firm Chainalysis.

In Q2 2021, over 60% of DeFi transactions accounted for transactions over $10 million, compared to less than half for all crypto transactions.

Banks and financial institutions are starting to commit capital into the crypto market segment due to DeFi’s appeal via the Ethereum blockchain.

The trend likely indicates that large-cap investors are increasingly interested in participating in the expanding DeFi field, instead of only offering Bitcoin-related investment products.

Additionally, Chainalysis’ preview report revealed an increasing gulf between DeFi and the broader crypto market in terms of adoption metrics.

DeFi activity is reportedly driven by institutions in major economies even as emerging markets continue to adopt legacy crypto assets such as Bitcoin (BTC).

Consequently, decentralized exchanges like Uniswap – the largest one in the ecosystem – are increasingly being scrutinized by regulators. The US Securities and Exchange Commission launched an investigation into Uniswap a few weeks ago.

Regulations in major economies have been discussing stricter monitoring protocols for the DeFi market. Gary Gensler, SEC chairman of the world’s most powerful economy, identified DeFi as one of seven crypto-related policy issues for the commission in August.

The decentralized nature of DeFi protocols has been criticized previously by Gensler, who said that many platforms are “highly centralized” and are required to be licensed by the authorities.

Despite a surge since July, recent price declines have tempered the market’s gains, with the market’s nominal total value locked falling under $100 billion.

U.S Dollar Stays Firm Over Growing Concerns Of Delta Variants

During the fourth trading session of the week, the dollar was supported by cautious risk sentiment due to concerns over the Delta variant, while the euro waited for the European Central Bank’s policy decision later in the day.

On Wednesday, the dollar index was at 92.7, rising for the third consecutive day as U.S. stocks stepped back as fears about the strength of the economy undermined their high valuations.

A three-week-old resistance line has now been crossed by Momentum, sending the benchmark greenback gauge to its highest level since August 19.

DXY bulls, however, are taking a breather before reaching another important level, namely the 200-Simple Moving Average band of 92.65 at the latest.

Even so, the quote stays above an ascending support line from July 30 while holding onto the previous day’s breakout.

As risk sentiment rose slightly on Wednesday, influential New York Fed Bank President John Williams said that the labor market needs more progress before the central bank can reduce its stimulus.

The Fed’s comments Friday, however, did not come as a surprise to anyone after surprisingly soft U.S. payroll figures effectively eliminated any possibility of tapering this month.

On the other hand, the European Central Bank is expected to unwind emergency economic aid it gave the country during the pandemic on Thursday.

Euro fell to $1.1819 from $1.1909 on Friday, maintaining its retreat from a two-month high.

Analysts predict the purchase of emergency supplies under the pandemic plan (PEPP) will decline from 80 billion euros a month to 60 billion euros a month by the end of the year, before falling again early next year.

Nevertheless, even after PEPP expires, the European Central Bank is expected to show ample support.

The ECB board will make sure that it will continue to purchase conventional assets if it is seeking to reduce its bond-purchase under the pandemic emergency purchase program.

That being said, the DXY will be redirected to the broader support line around 92.10 should the previous resistance line near 92.35 be broken.

Crude Oil Prices Halt Overnight Losses Due To Supply Squeeze

With U.S. producers, oil prices rose at their midweek trading sessions, reducing overnight losses. Hurricane Ida hit the Gulf of Mexico nine days ago, leaving operations crippled.

After losing 1.4% on Tuesday following the Labor Day holiday, U.S. West Texas Intermediate crude futures are up 0.2% at $68 per barrel.

Following a 0.7% decline on Tuesday, Brent crude futures rose 0.2%, to $71.83 a barrel. An ongoing delay in resuming operations in the Gulf of Mexico is weighing on the market

More than a week after Hurricane Ida made landfall, more than 79% of US Gulf production is still offline.

There are 79 unoccupied platforms. So far, the market has lost 17.5 million barrels of oil. About 17% of U.S. oil production comes from offshore wells in the Gulf of Mexico.

Since the pandemic’s depths, oil’s sizzling rally has been interrupted as delta spreads, curtailing fuel consumption. It is expected that the market will tighten through the end of the year after China, the world’s largest oil importer has contained its outbreak of variants.

Brent was trading 64 cents for the prompt time spread in backwardation — a bullish structure in which near-dated contracts were more expensive than later-dated contracts. On Monday, the price was 60 cents.

In Singapore, Covid-19 infections hit a one-year high, and the city-state is considering imposing more restrictions, though the Philippines is backtracking on easing curbs there.

Although more than six million Americans have been vaccinated, the death toll in the country is over 650,000.

On Wednesday, the American Petroleum Institute will release its inventory data, and the Energy Information Administration data analysis of crude production and refinery output will be released on Thursday

Crypto Giants’ Impact On Africa

The world’s second-most populous continent faces new economic challenges as the African Development Bank projects that Africa’s real GDP will grow by 3.4% in 2021 after contracting by 2.1% last year.

Still, Crypto assets have seen accelerated adoption among a growing number of Africans as a result of the entrance of crypto giants sparking a revolution within the industry as a whole.

Some of its key markets, such as Kenya, Nigeria, Togo, and Ghana, are among the top crypto adopters according to Chainalysis global crypto adoption index data, primarily due to their high volumes of peer-to-peer (P2P) transactions when adjusted for PPP and internet penetration.

Artur Schaback, the COO and co-founder of Paxful a leading Bitcoin peer to peer trading platform, also credited the company’s grip as regard Bitcoin P2P trading via long term investments and physical presence thereby printing it with about 2.5 million African users with over $2 billion in transactions since its inception, improving productivity and remittance efficiency amongst Africans.

The largest market for Paxful, is Nigeria, with 1.5 million users and a volume of over $1.5 billion to date (since 2015).

Currency devaluations are common in fast-growing economies, causing residents to buy crypto assets on P2P platforms in order to preserve their savings.

Crypto assets are also used in these areas for international transactions, such as remittances, or commercial transactions such as purchasing goods for import and export.

Shay Datika, the founder and president of INX Digital assets, which offers one of the first security tokens that are registered with the Securities and Exchange Commission, discusses the role that crypto will play in Africa, especially its financial system.

While the digital currency was created and thrived in some of the world’s richest economies, I believe it can take African economies to the next level after decades of struggling with traditional banking systems (if they exist at all).

Louis Schoeman, Senior Analyst with SAShares.co.za says efforts are now being directed towards forcefully integrating technology into banks and they do not have the advantage of being first to do so.

The national currency of most African countries can only be transferred outside the country in limited amounts. African residents can circumvent these limits by using cryptocurrency to meet their financial needs,

For the African economy, decentralized tokens and trading are attractive for several reasons: independence from incumbent banks, fast transfers, low fees, and the ability to access otherwise inaccessible virtual entities.

INX specifically ticks another major box: safety and regulation, guaranteeing that financially stressed individuals will not lose their money in get-rich-quick crypto schemes. And on top of that, access to financial products to invest, which was not accessible for them until now. “Shay Datika added.

Taking advantage of the cryptocurrency boom is a good move for Africa. Several African countries encounter high levels of unemployment as a result of the rapidly growing number of young professionals and aspiring entrepreneurs on the continent.

Changpeng Zhao, the CEO, and co-founder of Binance emphasized the role the world’s biggest crypto exchange by trading volume plays in terms of educating and empowering the world’s second-largest continent, after Asia.

Our focus has been to increase crypto awareness across the continent since 2020, equipping the masses with the skills and knowledge they need to safely navigate the blockchain world.

“Through Binance Academy and Masterclass, we’ve done this. Over 400,000 Africans have been provided with free blockchain education through the latter initiative since 2020. This is an amazing achievement! By implementing education initiatives in Africa, as well as expanding our ecosystem offerings, we are enabling more people to access crypto.”

Africa’s most popular sports game, football is also leveraging with Crypto as African football supporters are fast becoming familiar with fan tokens, which allow them to vote on a variety of minor decisions regarding their clubs.

Arsenal and AC Milan, two of the top football clubs in Europe, have launched tokens this year.

Head of Crypto Chiliz, a global sport-based blockchain company, Joe Grech testified about its functionality on the shore of Africa;

“Using Socios, active and passive fans can reach out to each other. When audiences don’t live near the stadium or in the country, clubs struggle to keep them engaged.

“Fan Tokens have given African football fans the chance to get behind their favourite teams, feeling more engaged with the club than ever before.”

FTX Founder and CEO Sam Bankman-Fried, talked about how he is working on growing his company in Africa – his company recently raised $900 million, giving it a market valuation of $18 billion;

“In Africa, one of FTX’s goals is to get its name out there; we believe we have the best product and user experience and are ready to share it with the world.
We are seeking ways to have a positive impact on the world through all of the initiatives, including through FTX foundation.”

“Our partnerships are no different, and we are working on a wide range of humanitarian projects.” Bankman-Fried added.

The African continent has the potential to become one of the biggest hotspots for cryptocurrencies, including both use and development. Government policy and the private sector’s involvement are the only hurdles.

DeFi start-ups are fast gaining traction in Africa, and it is either substantial legislation will be enacted to stop the progress of decentralized finance, or banks will become obsolete and semi redundant in the near future, according to Schoeman.

In Nigeria, plans to regulate the Crypto sector were put on hold until operators established bank accounts in Africa’s largest economy.

To being active in engaging with financial regulators, CZ mentioned that Binance continuously stays abreast of the ever-changing policies and regulations affecting the crypto industry. “Our concern is to protect consumers – that is why we need to find the best way to ensure a level playing field,” he said

Oil Traders In A Parabolic Scenario

After a dismal August jobs report, crude oil prices moved lower in the past week as speculation grew that the Federal Reserve would delay cutting stimulus.

The price of Brent crude, the global standard for oil, fell 0.6%, on Friday to $72.61 per barrel. Just 0.1% of Brent’s value was lost for the week.

Employers in August added 235,000 jobs, less than a third of the forecast 733,000, but the coronavirus pandemic continues to cause difficulties.

Only the improvement in the unemployment rate from July to August, which was 5.2%, gave Brent crude bulls a sense of solace.

As a result of the shockingly poor jobs growth, oil prices rose from their lows in anticipation of the Fed postponing stimulus tapering.

To support the economy, the Federal Reserve has been buying bonds and other assets worth $120 billion since the COVID-19 outbreak in March last year. During that time frame, the central bank kept interest rates close to zero.

Market observers expect OPEC’s policies to come into trouble as early as 2022, or even as soon as the end of the year if the coronavirus resurgence hits demand. Oil market forecasts were presented to the oil ministers ahead of the meeting on Sept. 1.

One of the most optimistic scenarios predicts that global oil demand could peak at 100 million barrels next year, less than a whisker away from the high point before the pandemic.

It will not be long before OPEC’s members will again have to think about cutting output rather than raising production unless oil demand continues to climb, or unless production outside the OPEC+ group continues to slump.

There will be a return to the old (and new) divisions and long, difficult meetings when that happens.

Bitcoin Propels High Amid A Resurging Dollar

In spite of the rebounding U.S. dollar, the key crypto asset largely held on to its gains since the bottom set-in late July, which saw the price remain above $51.5k. During the week, prices ranged from $46,465 to $51,851 a new high for the past 9 days.

Despite the U.S. dollar’s strong rebound at the London trading session, investors continued to wait for clarity about when the U.S central bank will begin asset tapering.

On-chain sentiment remains positive overall, suggesting strong gains in September. A multi-year low remains in spot exchange reserves.

A minimal outflow of Bitcoins to crypto exchanges along with falling transaction counts continue to drive accumulation among miners while aging groups of coins that realized profits during similar rallies are now accumulating again.

This group of coins appears to have sold the initial leg down when BTC was falling back in May 2021, when this group of coins is 12 months old to 18 months old.

During the March 13, 2020, global liquidity crisis, a portion of this group of coins fell from $10k to $3.8k as BTC fell from $10k to $3.8k.  Another event in March 2020 could have led to panic selling in this cohort.

The 12-18-month-old coins aged and continued to accumulate as Bitcoin consolidated above $30k to $40k and pushed high to its current price of around $50k after the May 2021 plunge to $30k

Based on Glassnode’s data, bitcoins younger than three months are the ones most likely to be spent during periods of volatility.  Yet, a decline in HODL waves for young coins indicates that the market prefers to hoard rather than to spend. A very strong downtrend is in play as young BTC comprise only 15% of the coin supply.

Demand and supply are seen from the perspective of an investor who does not plan on selling, while an investor who is willing to sell is on the supply side.

In a few short months, these young coins will transform into middle-aged coins (ages 3 months to a year) and old coins (ages 1 year and older). An increasing proportion of these mature coins suggests increasing illiquid supply because they are statistically less likely to be spent.

The crypto market is experiencing a powerful maturation trend with almost half of the coins in circulation aged between three months and three years.

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U.S Dollar Bears Claw Way Back After Disappointing U.S Payrolls

In response to Friday’s very weaker than expected jobs report, the dollar fell for the fourth straight day against a basket of major currencies.

Nonfarm Payrolls came in at 235K in August, below expectations of 720K and far below July’s 1053K. In addition, the PMI for Final Services dropped from 55.2 to 55.1 points, even though the experts were anticipating the indicator to remain stable at 55.2 points.

The Institute for Supply Management reported that activity in the services sector grew at a moderate pace in August, in part due to easing supply constraints and rising prices.

Despite a slight recovery in DXY, the ISM Services PMI fell unexpectedly, from 64.1 points in February to 61.7 points in March. In any case, keep away from the markets until the volatility subsides following these high-impact reports.

Dollar index fell to 91.941, its lowest since August 4, and was last down 0.2% at 92.014. About 0.7% of the index dropped for the week.

Below the weekly support line of 92.06, the DXY price has found support right on the upper median line of the descending pitchfork. It is possible, however, that rebound  might only last temporarily.

As a result, the index could fall at any time. A lower index could lead to a further loss of ground for the USD compared to other major currencies.

Due to uncertainty over Fed policy, the dollar has been subdued. As of last Friday, Fed Chairman Jerome Powell said the central bank was not in a hurry to reduce its stimulus while job creation continues.

COVID-19 cases have increased in recent weeks, raising fears that the economic recovery could stall. The Fed will likely keep its rate on hold as a result of the jobs data.

In August, market observers considered the 92 level to be a key support level for the dollar.

U.S Dollar Looks To Payroll Data For A Bailout

In the wake of a crucial U.S. jobs report, the dollar dropped to its lowest level in almost a month against major rivals.

A measure of the greenback’s comparative strength against six peers, the dollar index, was little changed at 92.207 after touching 92.151 earlier.

In a speech at Jackson Hole a week ago, Jerome Powell said that a taper was still possible this year, but that there was no rush to raise interest rates. That sent the greenback further downward.

The nonfarm payrolls data due Friday is expected to grow by 750,000, while unemployment is expected to decline from 5.4% to 5.2%.

It is estimated that between 375,000 and over a million jobs will be added. The economy is showing mixed signals ahead of the report.

It was reported overnight that layoffs reached their lowest level in more than 24 years. Nonetheless, Wednesday’s ADP National Employment Report came in much worse than anticipated.

Inflation rates on the continent are at decade-high levels, and the European Central Bank is expected to issue hawkish remarks ahead of its policy meeting on Sept. 9. The euro went up to $1.1878 on Aug. 4, after hitting $1.1884 on Aug. 4.

In addition to a move toward $1.19, there is talk that the ECB could signal a slower pace of asset purchases next week.

Today’s non-farm payrolls appear to have triggered a progressive short USD position on the currency market.

As Fed officials began suggesting the virus’ spread could delay policy tightening, the dollar index declined after reaching a 9-1/2-month high of 93.734 on August 20.

Still, DXY bulls can’t be ruled out of seeing 94 index points on the chart if they ignore RSI signals and cross the 93.50 resistance.

In other words, it is likely that the quote will extend recent gains around 93.45, but a further advance may be held back by the likely overbought RSI conditions