WASHINGTON (dpa-AFX) - Cryptocurrencies declined on Friday despite renewed rate cut expectations from the Fed, triggered by weak economic data from the U.S. Turbulence created by the trade tariffs unveiled by the U.S. and responses from trade partners as well as anxiety ahead of the monthly jobs data due from the U.S. weighed on sentiment.
Data released by the Institute for Supply Management on Thursday showed the ISM Services PMI falling sharply to 50.8 in March from 53.5 in February and way below forecasts of 53. The reading revealed the softest expansion in the services sector since June of last year.
U.S. President Trump had announced sweeping tariffs on trade partners on Wednesday causing turmoil in global markets.
In data to be released on Friday morning, the U.S. Bureau of Labor Statistics is expected to show an addition of 135 thousand to non-farm payrolls in the month of March, versus 151 thousand additions in the previous month. The unemployment rate is anticipated to be steady at 4.1 percent. Though the hourly earnings on a month-on-month basis is expected to be steady at 0.3 percent, on a year-on-year basis, it is expected to slip to 3.9 percent from 4 percent in February.
Market sentiment has also been weighed down by anxiety ahead of a speech by Fed Chair Jerome Powell on Friday. The Fed had recently attributed inflationary concerns as transitory and markets are keenly awaiting the Fed's latest outlook on inflation.
Fed rate cut expectations jumped rapidly as markets digested the sharp fall in the Services PMI data. The CME FedWatch tool that tracks the expectations of interest rate traders currently shows expectations of a quarter-point rate cut by the Fed in the May FOMC at 47.7 percent. It was 21.9 percent a day ago, 18.5 percent a week earlier and 43.4 percent a month ago.
Though till a day ago, markets had anticipated a probability of 21 percent for the Fed to hold rates in June, now markets overwhelmingly expect a rate cut in June. The likelihood of a quarter point rate cut is 47.9 percent and that of a 50-basis points rate cut is 46.9 percent. There is also a 5.2-percent probability assigned to a 75-basis points rate cut in June.
Amidst the market developments, the Dollar Index has slipped 0.15 percent on Friday, adding to the losses of 1.7 percent recorded on Thursday. Gold Futures have however gained 0.30 percent on Friday in contrast to the decline of 1.4 percent recorded on Thursday. Wall Street Futures are trading with losses of close to 3.5 percent on Friday after heavy losses on Thursday. Ten-year bond yields in the U.S have declined 3.8 percent on Friday, after shedding 2.2 percent on Thursday.
Overall crypto market capitalization is currently at $2.62 trillion, representing an overnight decline of 1.2 percent.
The CMC Crypto Fear and Greed Index, a proprietary tool developed by CoinMarketCap to measure the emotional state of the cryptocurrency market is currently at 25, versus 24 a day ago and 33 a week ago. The market remains in a state of 'fear' but has rebounded from the yearly low of 15 recorded on March 11, that implied a state of 'extreme fear'.
Bitcoin has shed 1.3 percent overnight to trade at $82,049. The 24-hour trading range was between $84,696 and $81,282.
Ethereum has also slipped 1.5 percent in the past 24 hours to trade at $1,771. Ether ranged between $1,834 and $1,751 during the past 24 hours.
4th ranked XRP is trading flat at $2.03. However, losses exceed 8 percent on a weekly basis and 2 percent on a year-to-date basis.
5th ranked BNB declined 1.1 percent whereas 7th ranked Solana lost 1.4 percent during the past 24 hours. 8th ranked Dogecoin however gained 0.4 percent. TRON jumped to the 9th rank overall with an overnight surge of 2.5 percent. 10th ranked Cardano lost 1.7 percent overnight.
97th ranked Pendle topped overnight gains among the top 100 cryptocurrencies with a surge of 10.8 percent. The token of the Pendle protocol, situated within the decentralized finance ecosystem that focusses on tokenizing and trading future yield, has added 11 percent in the past week and more than 20 percent over the past 30 days.
29th ranked Pi topped overnight losses among the top 100 cryptocurrencies with a decline of 14.8 percent. The PI token, a social cryptocurrency has erased more than 37 percent over the past week and analysts attribute the decline to the continuous unlocking of tokens that increase the token's supply.
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