The British pound hit an eight-day high on Friday to trade at $1.3229, but retreated early on Monday after 40 members of British Prime Minister Theresa May’s Conservative Party committed to signing a letter of no-confidence in her. The pound was down 0.52 percent to $1.3117 as of 2:35 p.m. HK/SIN on Monday. The currency was also lower against the euro, which was up 0.45 percent to trade at 0.881.
The U.S. dollar took advantage of the pound’s weakness by gaining against most of its trading partners as investors remained focus on the upcoming tax changes. The dollar index was trading at 94.49 .DXY on Monday afternoon after easing 0.6 percent last week on fears that implementation of the tax bill would be delayed until 2019.
Bitcoin Volatility Continues
Though prone to wild movements, bitcoin saw unexpected volatility over the weekend, calling into question whether investment in the cryptocurrency is a sound financial decision. On Saturday bitcoin plummeted 15 percent from around $6,500 to $5,507 before recovering to around $6,400. Bitcoin was trading at $6,296.99 as of 2:46 p.m. HK/SIN.
Following the sudden price drop of bitcoin, traders flocked to bitcoin cash which hit a record high of $2,477 overnight before crashing to a low of $1,224 on Sunday afternoon, according to data from CoinMarketCap. Developers are now debating the future of bitcoin-related cryptocurrencies with a small minority of developers advocating for an upgrade that increases the block size from one megabyte to eight megabyte.
Also pressuring bitcoin is the launch of ‘bitcoin gold’ which launched yesterday, the second project to fork away from the bitcoin blockchain (following bitcoin cash). Bitcoin gold is a new proof-of-work mining algorithm that uses similar technology to that used in Zcash. On the simplest level, the hardware that has been thus far used to mine bitcoin will not be used to mine bitcoin gold. Bitcoin gold futures struggled over the weekend, falling to $300 from $500. It remains unclear when or how they will recover.