Bitcoin consolidates ahead of key US dollar data
All eyes are on the Federal Reserve
January jobs report to offer more clues about a possible recession in the United States
Bitcoin hovers around $23k after rallying in January. It currently consolidates, mostly because investors await news from the United States economy.
Today is the month’s last trading day, but the trading week is still young. Starting with tomorrow, three major economic events may move Bitcoin and, with it, the entire cryptocurrency market:
Federal Reserve’s decision
Non-Farm Payrolls
Average Hourly Earnings
Federal Reserve’s monetary policy decision
This is a big week for the US dollar, thus, a big week for Bitcoin too. On Wednesday, the Federal Reserve of the United States presents its monetary policy decision, which keeps markets in tight ranges.
No one wants to take a bet ahead of such an important economic event, even though the market seems to expect a 25bp rate hike. But it is more about nuances and the message that the Fed sends rather than what it actually does.
Therefore, the press conference following the FOMC Statement is more important for financial markets than the actual interest rate decision.
Non-Farm Payrolls
Two days later, the Non-Farm Payrolls data for January will be published. The degree of the upcoming recession in the United States is still unclear, or if there will be one. In any case, the jobs data will make it clear what to expect in the months ahead from the largest economy in the world.
Average Hourly Earnings
Inflation may have peaked, but do not expect to ease rapidly. Yesterday’s data from Europe showed renewed upside pressures, and one should not be surprised to see something similar in the United States
Together with the jobs data, the Average Hourly Earnings (AHE) will shed light on the trend for US wages. Upside pressures should translate into higher inflation in the months ahead, thus potentially moving the dollar and the overall financial markets.
