Franco-German Libra Rejection as Gold holds Market Sway
Published on: 09/20/19 9:13 AM
The third week of September 2019 saw hopes of Facebook’s Libra cryptocurrency launch in Europe dim as both Germany and France rejected it. Also, markets responded to FOMC rates cut with brisk but cautious trading as more investors went for gold assets. Forex Broker comparison service FXBrokerFeed brings you current news and updates in the FX Broker Market, featuring FOMC further rates action and a gravitational slide towards gold.
Franco-German onslaught on Libra
French Finance Minister Bruno Le Maire and German counterpart Olaf Scholz announced opposition to Facebook’s Libra cryptocurrency
ever gaining a foothold in Europe. The announcement came on the sidelines of EU finance ministers meeting in Helsinki.
“We are both deeply convinced that the currency matters should remain in the hands of government,” “This is a matter of sovereignty.”
With Facebook’s command of 2.4 billion users, and WhatsApp at 1.3 billion users, the ministers pointed out that Libra posed risks too grave for a stable EU economy, and could easily regenerate into money laundering, terrorism financing, and data vulnerability.
However, authorities admit the reality of blockchain technology, and development of cryptocurrencies as an alternative to fiat currency.
In the meantime, many countries are developing crypto regulatory legislation in addition to central banks pondering own national cryptocurrencies to counter emerging onslaught of privately issued ones.
Gold Hedging against Fiat Currencies
Gold is on the uptake as a safe haven commodity because of risks inherent from a slowing global economy, and based on FOMC and other central banks lower trajectory tone for baseline interest rates.
Also, both the price for gold and Relative Strength Index (RSI) point to a bullish pattern
with a Monday gain of 0.8% that ticked $1,514 per ounce. However, prices dropped by 0.21% on Thursday to trend at around $1,483 following hawkish FOMC stance that left any further rate action in abeyance.
Additionally, the drawn-out tariffs stalemate, crude oil supply disruptions, and escalating geopolitical tensions in the gulf favor gold over fiat currencies volatility in the mid-term.
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