Investing.com– extended gains on Wednesday, briefly touching a three-week high as a softer-than-expected U.S. inflation print helped soothe concerns over higher interest rates.
But bigger gains in cryptocurrencies were limited by continued uncertainty over the U.S.-Iran war, as both sides launched more attacks and signaled few plans for de-escalation.
Bitcoin rose 1.8% to $65,368.1 by 10:16 ET (14:16 GMT), briefly hitting an intraday high of $65,623– its highest level since June 22.
Bitcoin recovers after PPI adds to signs of easing inflation
Bitcoin rose further Wednesday after fresh data pointed to easing price pressures at the wholesale level, extending a similar signal from Tuesday’s consumer inflation report.
The producer price index (PPI) fell a seasonally adjusted 0.3% in June, the Bureau of Labor Statistics said, confounding economists polled by Dow Jones who had expected the measure to hold flat. Producer prices were up 5.5% from a year earlier. May’s figure was revised down substantially, to a 0.6% gain from an initially reported 1.1% increase.
Stripping out food and energy, core producer prices rose 0.2%, just below the 0.3% forecast. A narrower core gauge that also excludes trade services increased 0.1% and was up 5.1% annually.
The report followed Tuesday’s consumer price index, which showed prices at the register fell 0.4% in June — the sharpest monthly decline since April 2020 — pulling annual inflation down to 3.5%. Core CPI held flat for the month, bringing its yearly pace down to 2.6%.
Both gauges remain well above the Federal Reserve’s 2% target, though they mark further progress in the central bank’s yearslong effort to tame inflation.
Markets are still pricing in a Fed rate increase later this year, potentially as soon as September. Fed Chairman Kevin Warsh cautioned lawmakers Tuesday that June’s soft inflation reading was not a “mission accomplished” moment.
A resurgence in U.S. inflation– especially in the face of renewed supply disruptions in the Middle East– could once again see rate hike fears creep back into markets.
US-Iran war rages on; Trump says strikes to continue until deal is reached
The U.S. and Iran traded strikes in the early hours of Wednesday, with renewed military action between the two showing few signs of easing.
U.S. President Donald Trump said his administration had been in contact with Iran on Tuesday, but warned that strikes against the country will continue and potentially escalate until a deal is reached.
Iran had retaliated against U.S. aggression by launching missile and drone strikes on several surrounding Gulf countries with U.S. bases. Tehran also kept up its attacks on commercial ships in the Strait of Hormuz and warned that it could disrupt other key shipping channels in the region.
The developments sent oil prices surging, keeping markets on edge over an energy-driven resurgence in inflation.
Crypto price today: altcoins rebound tracking Bitcoin
Broader crypto prices advanced on Wednesday, recouping a measure of recent losses.
But like Bitcoin, most crypto units were nursing deep losses this year, amid waning institutional and retail appetite for the sector. A broader pivot into artificial intelligence stocks also sapped appetite for crypto.
World no.2 crypto rose 2.8% to $1,933.86, while added 2.1% to $1.1280.
and rose 1.4% and 1.5%, respectively, while traded flat.
Among memecoins, edged higher 0.3% and gained 1.7%.
Vahid Karaahmetovic contributed to this report.
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