Depreciation trading, in which investors move money from fiat currencies like the dollar to “hard assets” with a limited supply, like bitcoin. and gold, could be back in fashion if Thursday’s U.S. nonfarm payrolls data confirms Fed Chairman Kevin Warsh’s latest view on inflation.
On Wednesday, Warsh said inflation risks had diminished. The comment sparked a rapid reassessment of the Fed’s interest rate hike prospects and sparked a rebound in both the largest cryptocurrency and the precious metal. Bitcoin has already surpassed $61,000, while gold has stabilized above $4,050 after falling to $3,942 earlier this week.
These nascent recoveries could really accelerate if jobs data due at 8:30 a.m. ET shows clear weakness in the labor market. Economists expect an increase of 110,000 jobs for June, up from 172,000 in May, with the unemployment rate stable at 4.3%. The average hourly wage is expected to increase slightly, from 3.4% to 3.5%.
