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Yen surges on BOJ policy shift speculations; dollar slides to seven-month low

SINGAPORE, Jan 16 (Reuters) - The dollar fell to a seven-month low against major peers on Monday while the yen spiked to an over seven-month peak as traders ramped up bets that the Bank of Japan may make further tweaks to its yield control policy at its meeting this week.

The Aussie breached the key $0.7000 level for the first time since August, and last rose 0.54% to $0.7013, after rising as high as $0.7019 earlier in the session.

Similarly, the euro hit a fresh nine-month top of $1.08725, and was last 0.3% higher at $1.0867.

Against a basket of currencies, the U.S. dollar index slumped 0.46% to a seven-month trough at 101.79, as the greenback extended its selloff from last week after data showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December.

With decades-high inflation in the world's largest economy showing signs of cooling, investors are now betting that the Fed may be nearing the end of its rate-hike cycle, and that rates would not go as high as previously feared.

"The confirmation of a deceleration in price pressures is building up hopes that CPI could fall further in coming months," said analysts at OCBC.

"An entrenched disinflation trend can reinforce expectations that the Fed could again scale back on its pace of hike beyond the February FOMC or even position for an earlier pause or dovish pivot."

The Fed's aggressive rate increases have been a huge driver of the greenback's 8% surge last year.

The Fed's aggressive rate increases have been a huge driver of the greenback's 8% surge last year.

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Markets are now pricing in a 91% chance of a 25 basis point increase by the Fed when it announces its policy decision in February, with a 9% chance of a 50 bp increase.

The Japanese yen rose to a more than seven-month peak on Monday, as expectations that the BOJ would make further tweaks to, or fully abandon, its yield control policy when it announces its monetary policy decision on Wednesday dominated market sentiment.

The yen jumped more than 0.4% to a high of 127.24 per dollar, and last bought 127.38 per dollar.

Markets have been pressing for the BOJ to shift away from its ultra-easy monetary policy, which caused the yield on Japan's benchmark 10-year government bonds to breach the central bank's new ceiling for two sessions. read more

"I think the whole world will be focused on Wednesday ... and probably the week in G10 (currencies) will be defined by what happens to the yen and yen crosses, out of that," said Ray Attrill, head of FX strategy at National Australia Bank (NAB).

"I don't think (the BOJ) has the luxury of time to say that they're going to assess and wait until Q2 or Kuroda to see out his term without making any further changes."

Current BOJ Governor Haruhiko Kuroda will step down in April.

The BOJ's yield curve control policy has been a huge factor behind the yen's 12% slump last year, and since the central bank's shock decision last December to widen the band around its yield target, the yen has jumped more than 6%.

Sterling was last 0.45% higher at a one-month peak of $1.2288, while the kiwi similarly jumped 0.6% to $0.64235, after hitting a one-month top of $0.64255 earlier in the session.

U.S. markets are closed on Monday for a holiday, making for thin trading.

Solana Tide Surges 58% In Second Strong Week!

After collapsing more than 80 percent over the course of last year, Solana is having a stellar in 2023. The price of SOL has more than doubled this month, rising more than 58 percent to $23.70 in the last seven days, according to CoinGecko.

Not only that, but the once-celebrated "Ethereum killer" saw its highest trading volume since the week of the spectacular collapse of crypto exchange FTX, which crashed Solana along with most of the crypto market in November.

It's a remarkable rebound for Solana. Less than a month ago, SOL was closing out the year down 94 percent, hitting a two-year low of $8.17 and dropping out of the top twenty coins, per CoinGecko data.

Now, Solana briefly bumped Polygon MATIC out of the top ten cryptocurrencies by market cap, which cleared $9 million on Saturday afternoon. Its price is also at its highest point since FTX fell. In one 24-hour period last weekend alone, Solana jumped 21 percent.

Solana's recent run of good news was boosted by BONK, a Solana-based meme token, which set off a flurry of buzz around Christmas and pushed the price of SOL to a seven-day high at the turn of the new year. Coin collectors seemed eager to celebrate a new dog-themed entry into the marketplace, alongside Dogecoin (DOGE) and the Ethereum-based token Shiba Inu (SHIB).

BONK logged an eye-popping 3,300% spike in the first week of the year—albeit to $0.00000487, according to CoinGecko. While a subsequent five-trillion token burn didn't keep BONK on an upward trajectory, its price sliding 69 percent last week, it's still sitting atop a $57 million market cap. In fact, its price even rose 20% over the past 48 hours.

Crypto.com Experiences Mass Withdrawals, Is CRO the Next FTT?

The past weekend was no less than a nightmare for the crypto space, as market participants and influencers went against Crypto.com. Similar to that of FTX, Crypto.com also had huge CRO and SHIB in their reserves which created huge panic within the market. The rounds of the platform facing liquidity issues quickly circulated within the space, due to which the CRO price was very badly affected.

It all began when the platform accidentally transferred nearly 400 ETH from Crypto.com to the Gate wallet a fortnight ago. While the CDC stated that these tokens had to be sent to their cold wallet, they were transferred to a whitelisted corporate address. Meanwhile, many believed that it was just another coverup for the proof-of-reserve with Changpeng Zhao information
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On the other hand, the outgoing transactions spiked high on CDC with more than 20K while the incoming transaction maintained a single-digit value

Meanwhile, the CDC has still not undergone full scrutiny as $1 billion is claimed to have been sent to FTX but turns out to be an actual exposure of only $10 million. However, the founder cleared up the claims and said that the platform has very little exposure to FTX and is used in trading venues to hedge customers’ trades. According to the CDC founder Kris Marszalek information
, Coinbase also has $15 million stuck at FTX for the same reason.

As a result, the platform recorded huge outflows of more than 90,000 Ethereum transactions against its normal range of 6,000 to 6,500 transactions per day. However, the crypto influencers do believe the CRO price may also follow the fate of FTT and do not appear to be convinced with the reserves of more than $2 billion, having nearly 34% in BTC and 21.56% in SHIB in their portfolio.

Security has been in the spotlight in recent times, as the recent episode illustrates the normal routine of crypto exchanges. Moreover, it highlights the point when the market participants are quite sure about the project and when they fall into FUD & quickly withdraw.

Visa Terminates FTX Debit Card Program

The world’s largest payment processor – Visa – has terminated ties with FTX less than a month after introducing a new debit card program.

Deeming the situation with the debt-ridden cryptocurrency exchange “unfortunate,” Visa’s spokesperson told Reuters that the company is “monitoring developments closely.”

The financial services company’s official statement read,
“We have terminated our global agreements with FTX and their U.S. debit card program is being wound down by their issuer.”

Visa announced a collaboration with FTX in October this year to launch account-linked Visa debit cards in 40 new countries.
The focus of the partnership was the expansion of the debit card program to Latin America, Asia, and Europe after its introduction to US customers.
FTX and 130 affiliated companies, including its sister trading firm Alameda Research, filed for Chapter 11 Proceedings in the United States on November 13.
Sam Bankman-Fried resigned as CEO of the company. His position was taken over by the veteran Wall Street bankruptcy lawyer, John J. Ray III, who notably served as the chairman of the disgraced energy behemoth – Enron – in the early-mid 2000s.
SBF, on the other hand, has faced tremendous backlash from the crypto community as the drama unfolded last week.
FTX started the year with a $400 million Series C funding round, taking its valuation to over $32 billion.
In yet another related development, US-headquartered crypto exchange Kraken announced freezing the accounts associated with “FTX Group, Alameda Research, and their executives” after engaging with law enforcement agencies.

Author: Chayanika Deka

Binance Starts Recovery Fund for Crypto Projects Facing Liquidity Crisis

CZ said that more details will be announced in the coming days, and said that the fund is open to industry co-investors.
Tron founder Justin Sun said that Tron, Huobi Global and Poloniex will support Binance in its initiative. Huobi Global also confirmed this in a tweet.
This announcement comes a month after Binance Pool said it was committing $500 million in the form of a lending facility for struggling bitcoin miners.
Binance's BNB Token is up 3% on the news. Bitcoin and Ether also both gained 4% after the announcement was made.
In remarks made Monday at the B20 Summit in Indonesia, CZ said he wanted the industry, as well as regulators, to take responsibility for cleaning up its act.
"We will we will try to collect the other industry players together to form an industry association globally, and try to deal with some of the common standards in business," CZ said, citing recent crypto market events as a reason for the initiative to happen "very soon."