On Monday, It was a slow start to the week, with volumes at minimums due to a holiday in the US. The greenback remained generally strong, although most major pairs remained confined to tight intraday ranges.
The EUR/USD pair continued to hold above the 1.1800 level, stuck around 1.1820. GBPUSD was weak against the dollar due to Brexit concerns.
Due to US markets being closed, commodities were also confined to tight intraday ranges. Gold held around $1,930 a troy ounce, while WTI trades around $39.00 a barrel.
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On Tuesday, the US dollar remained strong against major rivals except safe-havens as risk appetite soured. GBPUSD took a nosedive as Jonathan Jones, head of UK’s legal department quit on the back of bottlenecks relating to Brexit and other international matters.
Gold collapsed on dollar’s demand, bottoming at $1,906 a troy ounce. The metal, however, recovered sharply from the level to finish around 1,930. Crude oil prices, in the meantime, fell to fresh 3-month lows with WTI settling at $37 a barrel.
The Dow Jones Industrial Average lost 632.42 points, or 2.25%, to 27,500.89, the S&P 500 dropped 95.12 points, or 2.78%, to 3,331.84 and the Nasdaq Composite fell 465.44 points, or 4.11%, to 10,847.69.
On Wednesday, Bloomberg reported that some ECB policymakers had become more confident in their forecasts for the region’s economic recovery, potentially reducing the need for more monetary stimulus this year, according to people familiar with the matter. EUR/USD jumped to 1.1820 from a fresh multi-week low of 1.1752, dwarfing the US dollar in strength.
Gold benefited the most from the intraday dollar’s weakness, surging to $1,950 a troy ounce, staying around the level at the end of the day. Crude oil prices were also able to recover some ground, but gains were modest. WTI settled at $38 a barrel.
Dow Jones Industrial Average rose 439.78 points or 1.6%. S&P 500 gained 67.22 points, or 2.02%. Nasdaq composite added 293.87 points, or 2.71%.
On Thursday, a London session opening with optimism due to new ECP monetary policies soon turned sour with GBPUSD collapsing below 1.2800 as the UK attempted to adopt the Internal Markets Bill, which could override parts of the Brexit withdrawal agreements with the EU. The EU responded with a threat of legal remedies should the UK fail to amend the bill.
Gold prices soared with the ECB but trimmed intraday gains with renewed dollar’s strength during the last trading session of the day. The bright metal closed the day with modest losses around $1,944 a troy ounce. WTI, in the meantime, was weighed down by equities, ending the day around $37.00 a barrel.
The Dow Jones Industrial Average fell by 405.89 points, or 1.5%, to 27,534.58, and the S&P 500 fell by 959.77 points, or 1.8% to 3,339.19. The Nasdaq Composite also slid into negative territory, down 221.97.7% to 10,919.59.
The greenback remained weak on Friday but moved off its daily lows following the release of U.S August inflation figures, which were upbeat. Core CPI in the country ticked higher to 1.7% from 1.6%.
GBPUSD remained unchanged for the day, finishing the week at lows last seen in July. AUDUSD, EURUSD and EURJPY finished the week largely unchanged.
Commodities closed the week with modest losses. Gold settled at $1,940 a troy ounce, while WTI finished at $37 a barrel.
Written by;
Nnadi Victor
An Independent Economics Researcher
