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  • Stronger Dollar Hits Sterling
  • Reopening Concerns Persist Over Virus Variants 
  • Powerful Stock Market Run Continues

The GBP continued to remain under pressure this week on the back of a US Dollar that is returning to strength. The pair dropped back below 1.415 as the USD showed control with little positive news to drive the Pound. This comes as worry persists both in the UK and around the EU about rising numbers of COVID cases, particularly the Delta variant. This concern has as yet failed to put a dent in Wall Street though. Despite a slow opening today, markets have been positive for much of the last 7 days.

Dollar Back on Top as Sterling Flounders

With the UK leading the charge in terms of sticking to their reopening plan, the Pound had led the way in strength until quite recently. While the plan to get back to work in Britain has not been impacted, domestic concerns and worry over COVID cases have now been reflected in the forex trading of Sterling. The currency is at a low point that has not been helped by the awakening Dollar.

Besides virus worries, Britain, and leader Boris Johnson are still dealing with the aftermath of Brexit in the background. The key issue remains around a customs border between the UK and Northern Ireland. Much to the anger of EU leaders, the UK is seemingly content to continue ignoring this part of the agreement which they made. This leaves a rising lack of certainty on future relations with the bloc.

Euro Kept Flat Despite GDP Upgrade

On a relatively quiet day for major figures in the Eurozone, they too have felt the strength of the returning US Dollar, albeit not with as much difficulty as their neighbors in the UK. This is illustrated by the fact that despite an upgrade in the final Q1 GDP figures for the region, the Euro remains pressed below 1.22 against the Dollar.

On the upside, there was the GDP upgrade but on the other end, German ZEW economic sentiment numbers missed their target today. This follows a disappointing miss on factory orders in April from the largest economy in the EU. This data showed a 0.2% contraction where analysts had expected a 1% gain.

Wall Street Continues Strong Form

While forex brokers grappled with demand for the Dollar, Wall Street is showcasing a continued winning streak. Markets have generally been strong across the board day after day despite a relatively flat opening today. This has seen a strong rebound in many tech, and reopening names.

US treasury yields remain a strong contributing factor here. These have remained low despite the ongoing concern over inflationary pressure. The retail trading boom has come roaring back again too. This has seen huge gains in many popular names like AMC and Clover Health as the SEC says they are continuing to monitor the action and will take steps to protect retail traders.

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Naabiae Nenu-B is a Medical Health Student and an SEO Specialist dedicated to flushing the web off fake news and scam scandals. He aims at being "Africa's Best Leak and Review Blogger" and that's the unwavering stand of Xycinews Media.

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Fx Analysis

Precious Metals Rise Significantly With Rate Fears Soothed

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  • Gold and Silver Strongly Positive Today
  • Other Precious Metals Follow Closely
  • US GDP Miss Likely to be Focus of Day

Commodities news has had a relatively quiet week by comparison with the other markets as equities endure an earnings season rollercoaster and the torrid week looks to end on a positive note for US-listed China stocks. The Dollar has also continued to strengthen in the forex market following the Fed policy announcement though more on the back of the US miss on GDP numbers released today. This is also likely to have an impact on metals and other commodities but for now, gold, silver, platinum, and palladium have all moved meaningfully higher during the early US trading. 

Price Jump for Gold and Silver

Both of these precious metals have largely managed to stay out of the limelight recently. With the environment being quite tumultuous, there were minor movements in both, the general feeling though has been one of traders holding on to see how things developed. This strategy has paid off today with a healthy boost to both. Gold has peaked above a weekly high of $1825 while silver closes in on $26. 

This represents a move of more than 2% at the time of writing for gold, and more than 3% for silver. The main reason behind these moves at this point in the week certainly seems to be the Fed policy announcement and the fact they are standing behind their low interest rate with no short-term plans to change. 

Other Precious Metals Also Rising 

Alongside gold and silver, it has been a positive start to the day for platinum and palladium. Both are up over 1% on the day so far and are also likely beneficiaries of the Federal Reserve position to continue support for low interest rates. Although the Dollar has risen again on news of the US GDP figures, both seem to be holding their positive position. 

Although a weaker US Dollar would be helpful for the most part for these two as well as gold and silver, other factors need to be weighed. The interest rate is a key issue that can make investing in precious metals much more attractive when it stays low. Add in the industrial uses boom that can accompany such market conditions, and it is typically a winning formula.

US GDP Miss Surprises Analysts

Market analysts had predicted a rise of 8.4% for the previous quarter from April to June. This number has actually come out at 6.5% before any revisions. It is quite a wide economic miss and traders will have to weigh up these figures as the day progresses.  

So far, however, there has been very little sign of the market taking this miss as harshly as many would usually expect. The US Dollar has strengthened, but this has not taken anything major away from commodities, or more specifically precious metals in gold and silver. Wall Street is also expected to open higher despite the news.

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Fx Analysis

Senator Warren Urges Action While BlockFi Granted Extension – Regulation Weekly

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For digital assets to thrive, they need to operate within the boundaries of current and future regulations – not skirt around them.  This past week various developments were seen, shedding light on the mindset of regulators, along with enforcement actions being taken.

Tether

Stablecoins, such as market leading Tether, are pivotal to the success of digital assets.  Whether it be cryptocurrencies, digital securities or some other niche sector, stablecoins play an important role in providing investors a widely accepted and non-volatile means of settlement and exchange.  This role underscores the importance of trust within Tether – something that may be wavering once again reports indicate a new probe in to the company is being undertaken by the United Stated Department of Justice (USDOJ).

The allegations, which center around Tether executives, suspect that bank fraud was committed.  This was done as undisclosed accounts were opened abroad in an attempt to obfuscate the relationship of various transactions to digital assets.

As alluded, this is not the first time that Tether has come under attack by a regulatory or enforcement body.  In fact, Tether itself views these most recent developments as trivial click-bait, as they are founded on already resolved events.  Tether responded to development, stating,

“Today, Bloomberg published an article based on unnamed sources and years-old allegations, patently designed to generate clicks. This article follows a pattern of repackaging stale claims as “news.” The continued efforts to discredit Tether will not change our determination to remain leaders in the community.

Tether routinely has open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability. We are proud of our role as industry leaders in promoting cooperation between industry and government authorities in the U.S. and around the world. We remain committed to our customers and the industry-leading technology and transparency that has led to our growth. 

It is business as usual at Tether, and we remain focused on how to best serve the needs of our customers.”

Warren + Yellen

While the USDOJ may have its hands full with Tether, Secretary of the Treasury, Janet Yellen, is being called upon to ‘reign in cryptocurrency’ by Senator Elizabeth Warren.

“I have become increasingly concerned about the dangers cryptocurrencies post to investors, consumers, and the environment in the absence of sufficient regulation in the United States.  However, as the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, the Council must determine whether these trends raise concerns beyond investor and consumer protection and extend to broader systemic vulnerabilties that could threaten financial stability.”

The above excerpt is from a recent letter written by Senator Warren.  In it, the Senator also highlights various areas of risk posed by digital assets, and a need for coordination between the Financial Stability Oversight Council (FSOC) and other regulatory bodies to ensure the soundness of the financial system.  The following are those areas of risk identified by Senator Warren.

  • Exposure to Hedge Funds and Other Investment Vehicles that Lack Transparency
  • Risk to Banks
  • Unique Threats Posed by Stablecoins
  • Use in Cyberattacks that Can Disrupt the Financial System
  • Risks from “Decentralized Finance” (DeFi)

This pressure being placed on Janet Yellen by Senator Warren is simply the latest example of the her strong stance against digital assets.  Weeks ago, the Senator criticized the Securities and Exchange Commission (SEC), as she felt that it’s, “lack of common-sense regulations has left ordinary investors at the mercy of manipulators and fraudsters”.  Building on this sentiment, Senator Warren continued, stating, “The SEC must use its full authority to address these risks, and Congress must also step up to close these regulatory gaps.”

BlockFi

Securities violations can be a serious and costly mistake – just ask Robinhood.  The latest company to find itself under a regulatory microscope is none other than BlockFi.

As the recipients of a recent cease and desist order, issued by the New Jersey Bureau of Securties, BlockFi is being accused of “funding its cryptocurrency lending operations and proprietary trading at least in part through the sale of unregistered securities in violation of the Securities Law”.

These events have prompted BlockFi CEO, Zac Prince, to reach out and update its client-base on the developments surrounding its cease & desist order.

“We’ve said time and again that the key to our industry’s success is appropriate regulation. Ultimately, we see this as an opportunity for BlockFi to help define the regulatory environment for our ecosystem…We have been engaged in a productive discourse with regulators to protect your interests and expand accessibility to innovative financial solutions for all.”

As one of the most well-funded companies involved with digital assets, all eyes – investors and platform users alike – will be on this situation, as its end result will directly impact not only BlockFi, but no doubt its various competitors as well.  For the time being, the New Jersey Bureau of Securities has granted BlockFi an extension on its timeline to September 2nd, for shutting down certain services.

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Fx Analysis

The Canadian Crypto Landscape Is About To Change, Here’s How Investors Can Prepare

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The Crypto Landscape Is About To Change Forever

Canada has continued to be at the forefront of the cryptocurrency world, leading in areas such as innovation, DeFi, and cryptocurrency adoption.

According to Statistia, nearly 32% of all Millennials own cryptocurrency, a number that continues to grow on a yearly basis.

This growing adoption and interest in cryptocurrency has led the Canadian Government to push forward on the boundaries of innovation as well, bringing about change that will forever shape the cryptocurrency landscape in Canada.

This change is regulation of all cryptocurrency trading platforms that wish to operate in Canada  and provide services to Canadians.

Investors need to prepare in order to ensure they’ve got complete control over their cryptocurrency investments, and are able to take advantage of the opportunities that will be available to them.

Regulation – Security, Standardization, and Investor Protection

As adoption of cryptocurrency continues to increase, both new and existing investors want to ensure they’re protected.

The new regulatory frameworks that the government is putting in place help ensure that investors are working with companies that are fully compliant, protect their data, and are adequately insured.

Unlike the numerous exit-scams that the industry has seen over the years, regulation pushes to bring protection and standardization with security, and will reduce the likelihood of a trading platform closing with investors’ funds.

Temporary Closure of Trading Platforms

Exchanges that do not follow the regulatory framework will need to cease providing services to Canadian investors, or will need to exit the country altogether. A failure to do this will result in extremely heavy fines imposed by the Canadian government.

Unfortunately this means that many Canadian investors’ current trading platforms will close or stop offering services. Investors need to prepare for the short notice and quick turnaround time that a trading platform may be required to take to reduce or restrict services.

While it is uncertain how many trading platforms will temporarily or permanently close their doors to Canadians, these reductions could result in blocked accounts, crypto seizure, or an inability to access any investment. This has already happened with Binance ceasing operations in the United States, and has happened with Binance announcing it’s ceasing of operations in the province of Ontario.

Investors should expect to see an increase in trading platform closures across the country, leaving only those who are regulatory compliant in operation.

Temporary Reduction in Crypto Offerings

Investors should also expect to see a temporary reduction in crypto offerings while the Canadian regulatory environment makes a transition.

More specifically we will see a reduction in the amount of coins that are available, as regulatory compliance will mean trading platforms will have to undertake extra scrutiny in terms of coin offerings.

Additionally, crypto loans, interest bearing DeFi products, and trading products like options or leveraged trading will also temporarily be reduced until they can be fit under the regulatory framework.

While the regulatory framework will adjust to include these products eventually, in the early days of the new regulatory environment, investors should expect to have limited access to these products if at all.

Investing on Regulatory Compliant Trading Platforms

The broad sweeping implementation of regulation on the Canadian crypto landscape means that investors will need to start trading with regulatory compliant platforms.

Investors looking to move money to regulatory compliant trading platforms will want to ensure the platform of choice is registered as an MSB (Money Services Business) with FINTRAC (Financial Transactions and Reports Analysis Center of Canada), and is registered with the OSC (Ontario Securities Commission) or similar in their respective province.

While many trading platforms in Canada do not fall into the regulatory compliance category, Coinberry is on the brink of being the first fully-regulated cryptocurrency trading platform in Canada with the OSC.

Having predicted the need for a regulatory environment years ago, Coinberry has spent the better part of 2-years working with Canadian regulators to ensure their trading platform is fully regulatory compliant and that investors are fully protected within the boundaries of the law. This  means that once regulatory implementation is put in place in the next 2-5 months, investors will still be able to fully access their cryptocurrency and cryptocurrency trading capabilities on the Coinberry platform.

The Future Is Bright

Canada’s cryptocurrency landscape is filled with potential and possibility.

Home to many of the leading minds in the cryptocurrency space, and some of the top innovations in the space, Canada will continue to provide cryptocurrency investors and innovators with an environment that fosters growth.

Canadian regulators are already moving ahead of the pack, but continuous work will need to be done to ensure Canadian investors are protected and new opportunities can develop.

Investors who understand the shifting landscape and the points listed above, will be able to continue to invest in a way that’s safe, secure, and profitable.

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