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El Salvador has secured a $1.4 billion loan from the IMF, contingent on limiting its Bitcoin and crypto initiatives. The agreement mandates that Bitcoin acceptance by the private sector will be voluntary, and government involvement in the Chivo wallet will be gradually reduced, with taxes paid only in US dollars. Despite this, the country plans to continue purchasing Bitcoin for its Strategic Bitcoin Reserve.
UBS analysts predict the dollar will weaken less than previously expected in 2025, following its recent strength against rivals and a hawkish stance from the Federal Reserve. While the euro may trade around $1.05 against the dollar in the first half of 2025, risks of a drop toward parity remain due to tariff threats and macroeconomic divergence. However, improvements in Europe's economic backdrop are anticipated in the second half of the year, potentially supporting a recovery in the EUR/USD exchange rate.
UBS analysts predict the dollar will weaken less than previously expected in 2025, following its recent strength against rivals and a hawkish stance from the Federal Reserve. While the euro may trade around $1.05 against the dollar in the first half of 2025, risks of a drop toward parity remain due to tariff threats and macroeconomic divergence, though improvements in Europe could support a rebound later in the year.
The cryptocurrency market faced significant volatility following the Federal Reserve's unexpected reduction in future rate cut projections, leading Bitcoin to drop below $93,000 before rebounding to around $96,950. Despite this pullback, experts argue that underlying factors such as regulatory support, institutional adoption, and technological advancements indicate a bullish trend for Bitcoin. Trading volumes surged, with profit-taking evident as Bitcoin ETF outflows reached a record $672 million in a single day, while altcoins like Ethereum saw increased buying activity.
The cryptocurrency market is experiencing significant volatility, with Dogecoin dropping 11% in 24 hours and over 20% weekly, amid a broader sell-off affecting Bitcoin and Ethereum. This downturn follows a hawkish shift from the Federal Reserve, raising concerns about future rate cuts. Additionally, a recent security breach in Dogecoin has further undermined confidence in its stability, leading to $68 million in liquidations. Analysts are monitoring key price levels, with hopes of a potential recovery to $1.50 next year if market conditions improve.
Ether ETFs are experiencing significant net inflows, with a record $2.2 billion in the week of Nov. 26, and analysts predict they may outperform Bitcoin ETFs in 2025. The Ethereum network's growth, particularly in AI applications, and potential staking yields could further enhance Ether's appeal, with projections suggesting a spot price of $6,000 by late 2025 and up to $22,000 by 2030. The SEC has recently approved ETFs that include both BTC and ETH, potentially boosting inflows into Ether funds.
Finma has welcomed the ICC's recommendation for enhanced regulatory responsibilities, acknowledging past criticisms and emphasizing the need for "smart" regulation following the Credit Suisse crisis. The Swiss National Bank and the Swiss Bankers Association also stress the importance of targeted regulatory adjustments to maintain competitiveness. Meanwhile, political parties call for stronger oversight and effective implementation of the ICC's recommendations to prevent future financial instability.
Solana's price has plummeted 30% from a peak of $263 to around $190, following a broader cryptocurrency market downturn after the Federal Reserve's recent interest rate announcement. Concerns are growing that it could fall to $100 if bearish trends persist, especially with a significant drop in Total Value Locked (TVL) and mixed trader sentiment. However, a recovery is possible if support levels hold.
The Federal Council has expressed disagreement with several recommendations from the Parliamentary Investigation Commission (PUK) regarding the Credit Suisse crisis, asserting that existing too-big-to-fail rules have sufficiently strengthened systemic banks. While it supports adapting these rules to UBS's size, it rejects calls to restrict capital and liquidity easing for systemically important banks. The Council also criticized the PUK's report for containing controversial descriptions and not adequately incorporating feedback from the Federal Council.
The stock market faced significant losses as major indexes fell below key levels, influenced by a less-dovish Fed rate outlook and rising Treasury yields. FedEx surged on plans to spin off its Freight business, while Micron Technology and Vertex Pharmaceuticals plummeted due to disappointing guidance and drug study results, respectively. Despite a weak performance from Nike and other companies, a tame inflation report provided some relief on Friday.
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