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Bitcoin rebounds from drop with equity indices as strong US jobs data poses challenge to Fed rate

Bitcoin rebounds from drop with equity indices as strong US jobs data poses challenge to Fed rate

The BlockThe Block2024/06/07 14:28
By:Brian McGleenon

Bitcoin ticked higher despite global equity indices dropping after stronger-than-expected U.S. employment data.Strong labor market indicators suggest inflationary pressures might persist, making the U.S. Federal Reserve more cautious about ending its higher-for-longer interest rate policy.

U.S. job growth increased more than expected in May, a reading that could potentially prompt the Federal Reserve to delay cutting interest rates.

On Friday, the U.S. Labor Department reported that the unemployment rate ticked up to 4.0% for the first time since January 2022, while non-farm payrolls (NFPs) increased by 272,000 jobs last month, surpassing economists' forecasts.

The dollar rebounded broadly in the early U.S. trading session following the stronger-than-expected employment data, while bitcoin made gains despite equity indices moving lower.

Bitcoin follows equities lower

The employment data coming out of the U.S. hit risk assets. Major European and UK equity indices were red. In London, the FTSE 100 posted a 37.45-point decrease to 8,254.60 in mid-day trading.

The regional Stoxx 600 index traded up in Europe, retraced yesterday's gains and dropped 0.35% to 522.80. Meanwhile, in New York, the Dow Jones Industrial Average opened down 0.23%, the SP 500 fell 0.3%, and the NASDAQ decreased by 0.42%.

Bitcoin BTC +0.051% moved lower with depressed equity markets in Friday's trading. The world's largest digital asset by market cap increased by around 0.2% in the past day and was changing hands for $71,366 at 10:08 a.m. ET., according to  The Block's Price Pages .

ECB cuts interest rates

The European Central Bank (ECB) cut interest rates as expected on Thursday. The European monetary policymakers' move lowers the  ECB’s  key rate to 3.75%, down from a record high of 4%, where it has been since September 2023. It's the first time the ECB has cut rates since 2019.

The move by the ECB to cut rates comes after the Bank of Canada (BoC) lowered its policy rate to 4.75% on Wednesday, having held it at 5% since July last year.

Canada was the first G7 country to loosen monetary policy in the current cycle, followed by the ECB.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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