The foreign exchange market saw some volatile moves on Friday as the EUR/USD currency cross retreated to three-day lows near 1.1130. The euro has rolled back its gains all the way back to February. This drop comes as the U.S. dollar has gotten stronger against a number of other currencies. The GBP/USD was under renewed downward pressure, falling back to 1.3250. These advances mainly continue the broadly USD-buying trend, helping GBP mid-1.3200s retreating further for now.
Market analysts are today reporting that the Greenback has made surprising strides. This move follows longer-dated U.S. consumer inflation expectations rising, as shown by the University of Michigan’s survey. This new paradigm, driven mostly by the heightened demand for the dollar, has come as a shock most visibly to the euro and pound currencies. The euro, and especially so the euro, continue to be under severe duress as just about every economic report coming out drives it further down.
In the last few days gold prices have plunged below the $3,200 life line. This sharp decline has left investors abuzz, as it is on track to post its biggest weekly loss of the year. XAU/USD is still seeing some downside pressure as market sentiment continues to be erratic. Many are now questioning the recent reversal in gold prices as its long-term viability and how it will perform in the upcoming weeks.
Ethereum held up almost completely unscathed, staying just north of $2,500 on Friday. Since hitting a recent low in early April, Ethereum’s price has gone up close to 100%. The ETH Pectra upgrade has fueled a remarkable comeback. In only its first week, it has already successfully processed over 11,000 EIP-7702 authorizations. Even with such advances, the optimism around Ethereum’s resurgence has drawn a cautionary eye from some investors.
This divergence trajectory for these financial instruments is an example of the ever-changing landscape of today’s market environment. The very strong dollar is exerting additional pressure on gold. Cryptos such as Ethereum have an unclear future ahead of them despite this recent success.