Interbank market scan: Ethereum hits all time high; central banks, foreign exchange, cryptocurrency

Turkish inflation quickened for a fourth month as the lingering impact of a weak lira led to a broad-based rise in prices. Turkish Inflation Pressures Central Bank to Keep Policy Tight – Bloomberg

China drained funds from the financial system after a key cost of short-term borrowing tumbled from its highest level since 2015, showing officials remain wary of excess liquidity. China Drains Funds From Banking System as Cash Crunch Eases (msn.com)

Ethereum hit all-time highs on Wednesday, breaking above $1,500, as traders bought the cryptocurrency ahead of the launch of ethereum futures on the Chicago Mercantile Exchange next week. Cryptocurrency Ethereum hits record high ahead of CME futures launch (msn.com)

Blockchain technologies have already been seamlessly integrated into many industrial companies, and the online gambling sector is the latest to have been revolutionised by this technology. The Impact of Cryptocurrency on the Gambling Industry | Finance Magnates

Shares of several companies with deep ties to the cryptocurrency market soared on Tuesday, Feb. 2. The stocks are surging because many of the leading cryptocurrency tokens are on the rise today, which should translate into stronger financial results for all of these companies. Why Cryptocurrency Stocks Are Soaring Today (msn.com)

ING expects that the bearish dollar trend will be tested further over the remainder of this quarter and has adjusted its currency forecasts slightly. The bank expects confidence in the economic rebound to strengthen again in the second quarter. Updated Currency Exchange Rate Predictions 2021-2022: ING (exchangerates.org.uk)

Much occurred in 6 months: elections, change from Republicans to Democrats, Covid, lockdowns, gazillions of central bank meetings, average Inflation Targets. The market and the target price doesn’t care to such things and will never care in the future. The target price and the price path to target is the only concern. Currency market: S&P’s 24 hour trade (fxstreet.com)

As of 2:06 am AST, a week that may see impeachment so far has no impact on currencies …

PairsFederal Reserve as of 8 January 2021OANDA as of 11 January 2021OANDA as of 13 January 2021 2:06 am AST
GBP/USD1.35831.35031.3588
USD/CAD1.26981.27691.2751
USD/CNH6.47506.47826.4582
USD/DKK6.06976.11156.1137
EUR/USD1.22521.21671.2165
USD/INR73.310073.409373.2619
USD/MXN19.941020.120319.9592
USD/JPY103.8900104.1600104.1100
USD/NOK8.40748.51598.5070
USD/SEK8.20858.28078.2834
USD/CHF0.88430.88920.8893
USD/BTC0.00000.0000
USD/ETH0.00090.0009
Sources: Federal Reserve, OANDA

House votes resolution asking Pence to use 25th amendment to remove Trump

Last night the U.S. House of Representatives passed the following House resolution in its attempts to remove President Donald Trump prior to the end of his term. House Res 21 reads as following:

This resolution calls upon Vice President Michael R. Pence (1) to immediately use his powers under section 4 of the Twenty-fifth Amendment to convene and mobilize the principal officers of the executive departments to declare that the President is unable to successfully discharge the duties and powers of his office, and (2) to transmit to the President pro tempore of the Senate and the Speaker of thHouse notice that he will be immediately assuming the powers and duties of the office as Acting President.

Vice-President Pence has reportedly said that he does not intend to invoke the 25th Amendment. This means that the House will likely move to the next stage of its strategy which is to vote articles of impeachment against Mr Trump. Given the Democrats majority in the House, passage is expected.

The articles of impeachment would then move to the Senate for a trial. Indications are that, unlike last year’s attempt to remove the President from office via impeachment where a Republican-controlled Senate voted not to remove the President, there may be enough support on the part of Senate Republicans to find Mr Trump liable for “high crimes and misdemeanors”, the standard under the U.S. Constitution for removal. Senate majority leader Mitch McConnell has signaled that Mr Trump’s behavior, where allegedly encouraged supporters to march last week on the Capitol, amounted to an impeachable offense.

The establishment wing of the Republican Party, now in damage control as a result of the storming of the Capitol by Trump supporters and the resulting deaths of five people, would like nothing more than to move on from the Trump era and start laying the groundwork for the 2022 mid-term elections.

I don’t expect impeachment actions to have any bearing on pending policy actions designed to impact the economy. With only seven days left until the change in government, attempts to remove Mr Trump are designed to score political points with an electorate, a significant amount of whom believe the actions of individuals storming the Capitol amounted to an insurrection attacking the country’s representative institutions of democracy.

A dollar in the cryptocurrency world is still worth zero …

If you brought a US dollar into the crypto world, there would be no demand for it. Not surprising since the digital asset, argues Nouriel Roubini, has yet to move into the realm of a true currency. With no political economy to overlay, bringing the dollar or dollar-denominated assets into “crypto-world” for sale means a trader in crypto-world laughing in your face. Does cryptocurrency want to enter the realm of real currency or would it prefer remain a speculative asset? And if so, how can an argument be sustained that cryptocurrency can be used to serve the under-banked or unbanked?

USD/BTC0.00000.0003
USD/ETH0.00090.0009
Source: OANDA