In a recent analysis, Marc Chandler, a global markets specialist with over 25 years of experience and a frequent contributor to financial media outlets such as CNBC and the Financial Times, has offered a detailed outlook on what to expect in financial markets during September 2024.
According to Chandler, this month will be marked by crucial decisions by central banks and for significant movements in currenciesparticularly the US dollar.
Chandler points out that the United States Federal Reserve (Fed) will be one of the seven G10 central banks that will probably They will cut theBitcoin-inflacion-bancos-centrales-criptomonedas-prestamos/” target=”_blank” rel=”noreferrer noopener”> interest rates in September. However, he warns that not all central banks will follow this path. For example, he says the Bank of England is likely to stay on the sidelines for now, although it is expected to make at least one rate cut before the end of the year.
The analyst also highlights the situation of the US dollar, which peaked in September 2022 and has been fluctuating within a price range since then. Chandler anticipates that due to the slowdown in the US economy and the expectation of more aggressive Fed rate cuts in 2025, the dollar index (which measures its power in comparison to other currencies) could break its current range to the downside and head towards the 98.00 mark by the end of the year. However, he stressed that recent US employment data may have exaggerated the economic slowdown, which could lead to a technical recovery of the dollar in the short term.
Dollar index fluctuation since 1967. Source: TradingView.
In relation to currency movements, Chandler highlights a massive adjustment of positions in the capital markets from mid-July to early August. This adjustment was mainly financed by the sale of Japanese yen, Swiss francs and offshore yuan, resulting in an increased preference for risk assets. The Japanese yen, in particular, was at the centre of this movement, and its significant appreciation against the dollar was one of the main market stories in that period. Chandler mentions that in less than four weeks, the dollar fell by almost 12.5% against the yen, which underlines the volatility and complexity of today’s currency markets.
One of the concerns Chandler mentions in his analysis is the possibility of a Massive repatriation of investments by Japanese institutional investorssuch as pension funds and insurance companies. Although these investments are not leveraged, which reduces risk, there is always the possibility that an unexpected event in Japan could lead to a strong appreciation of the yen and a possible destabilization of other asset classes. CriptoNoticias reported At the beginning of August, the interest rate cut in Japan and the end of the yen carry trade had a negative impact on financial markets around the world.
As for the political situation, Chandler also mentions that the political landscape in Japan could change significantly in September with The possible departure of Prime Minister KishidaThis change, although not expected to drastically alter Japan’s economic policy, could have implications for the markets, especially with regard to the Japanese currency and the Bank of Japan’s monetary policy.
Finally, Chandler concludes his analysis by underlining the importance of be prepared for a challenging market environment in SeptemberHe notes that although the dollar’s cyclical trajectory appears to be over, volatility in currency markets and uncertainty surrounding central bank decisions will continue to be key factors to consider.
Marc Chandler (pictured) is a financial analyst with extensive experience. Source: Marc Chandler – X.
How will this situation impact bitcoin and cryptocurrencies?
The reduction of interest rates is generally seen as a positive factor for risk markets, which often include bitcoin (BTC) and cryptocurrencies.
When interest rates fall, investors often seek assets with higher yields than Treasury bonds, which can lead to a Increase in demand for BTC. In addition, borrowing costs are reduced, making it easier for investors to borrow money to invest in riskier markets, such as the stock market. cryptocurrencies.
However, it should be remembered that September has historically been the worst month for Bitcoin, as can be seen in the chart below:
Bitcoin monthly returns since 2013. Source: Coinglass.
Although this pattern is not an unbreakable rule, it does suggest that Investors should be prepared to cope with possible price drops.
This article was created using artificial intelligence and edited by a human on the editorial staff.
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