On Monday, markets started with a risk-off sentiment in the first two sessions, driving demand and price for the dollar. However, this changed in the New York session after the FED announced its intention to start buying a broad and diversified portfolio of corporate bonds, sending Wall Street into the green and sinking the dollar.
EURUSD recovered to the 1.1300 level and settled at 1.1315. The GBPUSD teased 1.2600 but remained below the level. The AUD, NZD and the CAD advanced against the US dollar. Gold prices finished unchanged after recovering its losses for the day. Crude oil edged higher due to optimism in the equity markets.
On Tuesday, the dollar advanced against major rivals as retail sales figures recorded a record percentage monthly increase, up by 17.7% in May. The equities market reacted downwards to Powell’s testimony before congress when he said the bond buying program won’t be aggressive. However it recovered towards the close.
The Euro and the Pound retreated from fresh week highs achieved in the European session. Gold closed the day largely unchanged around $1,726 a troy ounce. WTI settled above $38 a barrel.
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On Wednesday, EURUSD fell to 1.1206. GBPUSD finished the day around 1.2550. USDJPY eased towards 107.00. Gold and Oil ended the day little changed with spot at $1,728 and WTI just below $39. The DJIA and the S&P closed in the bear region on the bearish sentiment brought by the news of a book from former US security advisor Johnson Bolton on Trump.
The S&P 500 closed 0.42% lower, falling 13.19 points. The Dow moved 170 points lower to trade 0.65% lower. The Nasdaq was the best performing index, rising 0.15%.
Thursday was a red day. EURUSD fell through the 1.1200 level amid risk-off sentiment in the equities market. AUDUSD, NZDUSD and the CAD eased as well. Gold finished the day unchanged again after venturing to and fro the bear and bull region, settling at $1,725 a troy ounce. WTI finished around $39 per barrel.
The S&P 500 started poorly but recovered to close 0.04% in the positive region. The tech-heavy Nasdaq closed 0.33% higher and the Dow Jones was the least performer, trading 0.15% lower on Thursday.
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The dollar was stronger than most of its major rivals at the end of the week, as coronavirus-related concerns weighed on equities and the market’s mood. The EUR/USD pair finished the week at 1.1175 and the GBP/USD pair ended at 1.2350, both printing their lowest levels since June 1st. AUD, CAD and NZD, the commodity-linked currencies fell due to selling pressure. Gold price rallied to $1,742.70 while crude oil prices retreated with equities.
The Dow fell 0.80% on Friday while the S&P 500 dropped 0.62% and the Nasdaq closed just above its open.
Written by;
Nnadi Victor
An Independent Economics Researcher
