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The third week of September 2019 beheld shrinking prospects of Facebook’s Libra cryptocurrency as both Germany and France rejected its operational launch in the Eurozone. Also, the much awaited FOMC rates cut was received with cautious optimism that spiked choice for gold as a stable asset. Forex Broker comparison service FXBrokerFeed brings you the latest swings and shifts in the FX Broker Market, featuring FOMC hawkish rates action and a growing preference for gold.
Eurozone Rejection of Libra
French Finance Minister Bruno Le Maire and his German counterpart Olaf Scholz announced a categorical rejection of Facebook’s Libra cryptocurrency operating in Europe. The announcement coming on the sidelines of the EU finance ministers meeting in Helsinki was telling.
“We are both deeply convinced that the currency matters should remain in the hands of government,” “This is a matter of sovereignty,” said the ministers.
Facebook’s and WhatsApp’s cumulative total of 2.4 billion and 1.3 billion users respectively has spooked many governments into action. The ministers claimed that Libra posed serious risks for a stable EU economy in terms of money laundering, terrorism financing, and data vulnerability.
FXBrokerFeed notes that many countries are scripting cryptocurrency regulatory frameworks, directing central banks to embrace blockchain technology, and develop state backed cryptocurrencies to combat the aggressive charge from private sector players.
Golden Market Shine
Gold is gradually gaining from risk aversion as a slowing global economy induces currency volatility while FOMC, and other central banks continue to lower benchmark interest rates.
Also, both the price for gold and Relative Strength Index (RSI) indicated a bullish formation with a Monday gain of 0.8% that ticked $1,514 per ounce. However, not so dovish FOMC sentiments saw prices drop by 0.21% on Thursday to trend at around $1,483.
FXBrokerFeed contends that the US/China tariffs stalemate, ramped up geopolitical tensions in the gulf, and destabilized crude oil supplies leave gold a stable investment asset of choice over volatile currencies in the mid-term.
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