On Monday, the dollar suffered sell-off due to risk-on mood brought on by optimism in the Chinese stock market and impressive US services output.
EURUSD hit fresh multi-week high of 1.1345 while the GBPUSD lagged, ending the day unchanged below 1.2500. Aussie performed well gracefully making its way towards the 0.7000 figure, a psychological resistance. Gold price neared multi-week highs, ending the day at $1786 a troy ounce while crude oil stood its ground around $40.00 per barrel.
The Dow increased 1.78 percent to 26,287.03. The S&P 500 was up 1.59 percent to 3,179.72. NASDAQ rallied 2.21 percent to 10,433.65.
Read; Nigerian Stock Market Review and Stock pick for the week ahead 13th July – 18th July 2020
On Tuesday, the coronavirus regained control as market mover. With bad news spilled all over – from Australia announcing a six weeks lockdown in Melbourne to Brazil’s President Jair Bolsonaro testing positive for the virus, equities closed in the red worldwide.
EURUSD closed bearish, surrendering Monday’s gain to end at 1.1270. Gold soared to $1,797 amid risk aversion. Crude oil seesawed between gains and losses ending the day few cents above $40 per barrel. GBPUSD however continued its rally to close around 1.2590 ignoring lags in Brexit talks.
The S&P 500 dropped 34.40 points to 3,145.32. The Dow Jones Industrial Average fell 396.85 points, or 1.5%, to 25,890.18. The NASDAQ index came off an all-time high, losing 89.76 points, or 0.9%, to 10,343.89.
On Wednesday, moods were mixed as markets priced in investors’ faith in the vaccine race and the ability of economies to struggle through the pandemic. Dr. Fauci said Phase 3 vaccine trials will begin at the end of July while expressing his cautious optimism for a vaccine by year end.
US dollar remained weak. The Canadian dollar got a boost and the USDCAD fell to 1.3499. The pound benefited from British Finance Minister Rishi Sunak’s recovery plan, with GBPUSD piercing through 1.2600. AUDUSD also capitalized on risk-on mood rallying to 0.6940 in the American trading session. EURUSD bulls manned the driver’s seat pushing the pair from the 1.260 low to the 1.1351 high.
Read also; Bill & Melinda Gates Foundation and others get $2.9 billion donation from Warren Buffett
Gold remained bid as a safe-haven, breaking above the $1800 level and settling at $1818. Crude oil continued trading between $40 and $41.
Dow Jones Industrial Average rose 177.44 points, or 0.69%, to 26,067.62. S&P 500 gained 24.72 points, or 0.79%, to 3,170.04. The Nasdaq Composite added 148.61 points, or 1.44%, to 10,492.50.
On Thursday, the US dollar outperformed its rivals as risk aversion came back to the fore. EURUSD eased to finish at 1.12964. GBPUSD rallied to 1.26685 but was overturned by risk-aversion pushing it to close just below its open price 1.2608. AUDUSD finally made an attempt to break the 0.7000 psychological resistance but retreated to close in red around 0.69500. WTI and Brent retreated, weighed by both US COVID-19 contagion and grim prospect for travels.
DJIA unofficially closed down 373.91 points, or 1.43% at 25,693.37. S&P 500 unofficially closed down 18.90 points, or 0.60% at 3,151.04. NASDAQ unofficially closed up 55.80 points, or 0.53% at 10,548.30.
Friday initially continued its risk-off mood until Gilead came with reports of its C-19 treatment Remdesivir’s ability to reduce mortality rate by up to 62% and improve clinical recovery. Investors appreciated the news by pricing it into the market and pushing risk assets up. Wall Street surged and Gold eased to settle around $1800. WTI recovered losses but remained stuck around $40.
Coronavirus headlines were the drivers of the market in the last week and will continue to provide an undertone. We expect a slightly better market mood in the coming week as news over the weekend showed a decreasing number of new cases in the US.
Written by;
Nnadi Victor
An Independent Economics Researcher
Υes! Finally sߋmething abоut news.