Bitcoin tumbles as tensions rise in Middle East after Iran attacks Israel
The weekend gave a double dose of trouble to the financial market with Cryptocurrency valuations reacting bearishly to the heightening tensions in the Middle East after Iran attacked Israel on Sunday, Reuters reported.
Bitcoin, the most popular cryptocurrency, fell sharply by 8% after learning of an Iranian drone attack and missile exchange with Israel, which was reported in the news.
This indicated the first direct attack on Israel from Iranian territory.
Only digital currencies, widely believed to be risky assets, were actively traded during the weekend. The sudden sell-off, the analysts think, appears to be the initial reaction of the market to the high tensions.
Bitcoin, which recently rose to the highest levels with billions of private investments, fell from $70,000 to under $62,000 and later recovered to $64,000 by Sunday morning. Other than Bitcoin, other notable cryptocurrencies such as Ethereum witnessed a decrease of up to 10%.
Nevertheless, the Iranian currency, the rial, experienced a fall, reaching a record low against the US dollar on Sunday's unofficial market. Besides the Israeli stock market, the TA-35 index also saw a minimal slump in its performance
The situation in the Middle East remains very volatile and its influence on global markets has not yet been wholly understood. This weekend's events, nevertheless, show how geopolitical instability can trigger financial tremors even in the cyberspace of cryptocurrencies.
Peso sinks to a 17-month low(File Photo)Tiziana Celine PiatosPublished on: Apr 16, 2024, 16:44
The Philippine Peso sank to a 17month low versus the dollar on Tuesday amid rising geopolitical risks and tension in the Middle East, compounded by economic indicators from the United States. Data from the Bankers Association of the Philippines showed that the local unit reached P57 against the greenback, weaker by P0.192 or 3 percent from its P56.808 finish on Monday.
This was the peso's weakest close since its P57.375-per-dollar finish on 22 November 2022.
The local currency opened the day weaker at P56.85 compared to P56.65 on Monday.It also traded between P57.00 and P56.85. The average level for the day stood at P56.971. Volume declined to $1.100 billion on Tuesday from $1.589 last Friday.
In a Viber message, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort said the local unit closed weaker after top Israeli military officials signaled a possible retaliation to Iran's weekend drone and missile attacks on Israel that were foiled over the weekend.
He added that the Peso weakened on the back of better-than-expected U.S. retail sales data that could reduce urgency to cut Fed rates and the latest hawkish signals from Fed officials (Daly).
"The peso (is) also weaker after the local stock market at new 4-month lows or since 13 December 2023, as U.S. stock markets again mostly lower to new 1-month lows," Ricafort said."
(The peso also weakened) after the latest hawkish local signals that would delay any local policy rate cut to (first quarter of) 2025 and monetary policy would remain tight for the meantime," he added.
The rally, attributed to fading hopes of a ceasefire between Israel and Hamas and tightening supply on Mexico’s decision to cut crude exports, sets up Kenyans for expensive fuel in the coming months.
Read: Kenya shipping costs set to risePump prices have been on a sustained drop since December last year due to the global fall in crude prices. A litre of super petrol is going for Ksh199.15 ($1.59) in Nairobi while that of diesel is retailing at Ksh190.38 ($1.52).“In an increasingly bullish oil market, both WTI(West Texas Intermediate) and Brent, look set to continue climbing on the back of a strong demand outlook and new supply issues,” Oil Price, a global site that tracks prices of the commodity, says.
The landed costs of the refined fuel that Kenya imports largely mirror the trends in global prices of crude oil, meaning that Kenyans should brace for tough times in the coming months.
The global rally may negate the gains that Kenyans have enjoyed at the pump due to the strengthening of the shilling against the dollar.
The shilling’s recovery against the dollar notably since February this year further added to the gains of the global drop in crude oil prices, significantly easing pressure on Kenyans.
A litre of super petrol has dropped by Ksh18.21 ($0.14) in Nairobi between December and last month, while that of diesel has fallen by Ksh13.09 ($0.1) and Ksh14.32 ($o.11) for that of kerosene.