Stocks decline, dollar remains strong as attention on Fed increases; cryptocurrency surges

Asian stocks drifted lower on Tuesday as investors eagerly awaited the release of the Federal Reserve’s latest policy meeting minutes to gain insight into potential interest rate cuts. The dollar remained strong, while gold and crude oil prices fluctuated.

Gold pulled back from its all-time high on Monday, while crude oil prices declined amid concerns of prolonged high U.S. interest rates. Cryptocurrencies like ether and bitcoin saw gains, with speculation swirling around the potential approval of a spot ether exchange-traded fund by the U.S. Securities and Exchange Commission.

Market expectations currently include about 41 basis points of Fed rate cuts this year, with a quarter-point cut fully priced in for November. Traders are closely monitoring inflation data, with recent reports showing a slowdown in consumer price pressures.

Federal Reserve officials remain cautious about declaring inflation under control, with Vice Chair Philip Jefferson stating it was too early to determine if the slowdown is long-lasting. The upcoming release of the Fed meeting minutes could provide valuable insights into future policy decisions.

In Asia, stocks slipped, with the Hang Seng index pulling back from a multi-month peak. Japan’s Nikkei also traded lower after initially tracking gains in the Nasdaq. Market sentiment remains relatively positive, supported by expectations of U.S. rate cuts.

Gold prices eased slightly, while the dollar held steady against major currencies. Cryptocurrencies continued to surge, with bitcoin and ether reaching fresh highs. Analysts anticipate further gains in the crypto market, with bitcoin potentially retesting its all-time high in the coming days.