Futures in bitcoin, which has taken international financial markets by storm, hauled over their launch cost, while the U.S. dollar retained gains in Monday’s Asian session on expectations the Federal Reserve will adhere to its tightening path.
The most-traded contract on the Chicago-based CBOE Global Markets exchange opened at $15,460 at New York on Sunday evening, before jumping to a high of $16,660. They were quoted at $16,420, a close $1,300 premium to the cost on the Luxembourg-based Bitstamp.
The cryptocurrency has skyrocketed to a record high this season, making a gravity-defying 15-fold profit since the beginning of the year and bringing institutional interest. The explosion has also led to fears of a bubble.
“Bitcoin’s price surge continues to seem like another speculative mania,” said Shane Oliver, chief economist at AMP Capital in Sydney.
“Futures trading in bitcoin. . .will make it easier to exchange which will only suck more buyers,” Oliver said. “It is impossible to know how large it will get and for how long, so shorting it would be very large risk.”
Bitcoin costs were up 5.1 percent at $15,473 on the Bitstamp market, having jumped more than 30 percent a week.
Some market participants believe the fallout across other monetary assets from a possible bursting of the bubble could be restricted as bitcoin’s market capitalisation, around $240 billion, is considerably smaller than the value of gold outstanding.
Asian Stocks were slightly higher with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.2 percent, remaining above a current two-month trough of 542.27 points amid optimism about global growth following the powerful U.S payrolls data on Friday.
Japan’s Nikkei additional 0.1 percent while Australian shares climbed 0.1 percent. Chinese stocks opened firm following strong trade data on Friday, with the blue-chip CSI 300 index up 0.1 percent. Hong Kong’s Hang Seng index gained 0.3 percent.
China’s imports and exports accelerated last month after slowing in October in an encouraging indication for the planet’s second-biggest economy.
Forex traders were cautious before a big week for coverage meetings worldwide, with the Federal Reserve the only major central bank expected to raise interest rates. The Bank of England and the European Central Bank are likely to hold rates steady.
The U.S. dollar climbed to close one-month top against the yen , having climbed 1.2 percent a week. The dollar index, which measures the greenback against a basket of currencies, was stable near a three-week high.
Traders will continue to keep their eyes peeled for the Fed’s future rate projections as U.S. wages growth and inflation crawl at a snail’s pace.
Data out on Friday showed average hourly earnings in america nudged up 5 cents or 0.2 percent in November when economists had looked for a 0.3 percent gain.
The yearly increase in salary was also slower than prediction: the November figure came in at 2.5 percent versus a 2.7 percent anticipation.
The weakness persisted despite stronger-than-expected non-farm payrolls which climbed by 228,000 in November.
“We will be listening for any indications of a dovish change,” said Aerin Williams, New York-based forex strategist for Citi about the Dec 12-13 Fed meeting.
“This isn’t only because of salary but more so after Fed member Evans remarks that the current data may point to a delay in the rate growth.”
Chicago Fed President Charles Evans told the New York Times that the situation for a December rate increase wasn’t “obvious” because he worried about the slow pace of inflation.
Elsewhere, oil prices slipped with U.S. crude down 17 cents at $57.19 a barrel. Brent crude inched 24 cents lower to $63.16, drifting away from a current 2-1/2 year peak of $64.65.
Spot gold was barely changed at $1,247.31 an oz.
Courtesy: The Globe And Mail