3 Central Banks Shock The Market With Aggressive Rate Cuts; Yuan Crashes, Gold And Bitcoin Rallying

  • New Zealand, Thailand, and India make higher than expected rate cuts
  • Facilitating the global trend of monetary easing policy
  • USD/CNY trading above the important psychological level of 7
  • China expands its gold reserves in July, Gold expected to climb $1,600
  • Bitcoin trading above $11,840

Central banks in Asia-Pacific region— New Zealand, India, and Thailand, announced interest rate cuts in a surprisingly aggressive manner on Wednesday, furthering a global trend of monetary policy easing.

These new moves came as the fallout from the US-China trade war intensified, suggesting this rate-cycle cycle will only gather steam moving ahead.

USD/CNY trading above the important psychological level of 7

The trade war hit markets hard in Southeast Asia, a fast-growing region dependent on trade with both the US and China.

A Trio of Central Banks Surprise the Markets

The Reserve Bank of India cut rates by 35 basis points, for the fourth time this year. Bank of Thailand meanwhile unexpectedly cut the rate by 25 basis points, for the first time since 2015.

“In reviewing global developments, the MPC noted that global economic activity has slowed down since its meeting in June in an environment rendered hostile by elevated trade tensions and geo-political uncertainty,” Shaktikanta Das, the bank governor, said in a statement.

However, the Reserve Bank of New Zealand (RBNZ) is that stunned the market with its 50 basis point cut. With this twice the expected cut level, it took its official cash rate at an all-time low of 1%.

“Global economic activity continues to weaken,” the bank said in a statement. “Heightened uncertainty and declining international trade have contributed to lower trading-partner growth.”

The Reserve Bank of Australia, on the other hand, held rates at a record low, following the cuts in June and July.

These three rate cuts are the latest entries in an expanding global currency war. Weakening the currencies is often driven by rate cuts as such easing increases the money supply.

Gold and Bitcoin Rallying

The key drivers for easing monetary policy from central bankers are falling annual growth rates and expectations, softening domestic outlooks, weakening business and consumer confidence, and low inflation

This shift in monetary policy around the world came a week after the US Fed lowered its interest rate. The latest round of rate cuts combined with the trade war uncertainty has investors rushing to safer assets such as government bonds, gold, and Bitcoin.

Gold price, 6 months chart, Source: https://goldprice.org/gold-price-chart.html

This might be just the beginning, according to Goldman Sachs, that predicts gold’s price — already at six-year highs— to climb to $1,600 an ounce over the next six months.

Moreover, China’s central bank expanded its gold reserves again in July. The People’s Bank of China (PBoC) raised holdings to 62.26 million ounces from 61.94 million a month earlier, as per the data on its website.

Bitcoin price is up 220.4% YTD, Source: TradingView

Meanwhile, Bitcoin is up 17.6% in the past 7 days, currently trading at $11,840. Currently, on a bull run, it is expected that BTC price will hit it's all-time high (ATH) of $20,000 by the end of this year.

Bitcoin’s price is $48,848.89 BTC/USD exchange rate today. The real-time BTC market cap of $914.04 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $27.07 Billion and live coin value change of BTC -0.82 in the last 24 hours.

Live Bitcoin (BTC) Price:

1 BTC/USD =$48,848.8909 change ~ -0.82%

Coin Market Cap

$914.04 Billion

24 Hour Volume

$27.07 Billion

24 Hour VWAP

$48.49 K

24 Hour Change


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