In Friday’s currency and commodity upheavals, over-reaction to the moves in D.C. was evident. The EUR/USD traded under some modest bearish pressure, trading under the 1.1750 level in the second half of the day. The GBP/USD currency cross saw a similar trend, with the currency pair moving lower to around 1.3450 after lackluster UK Retail Sales figures. Moreover, the safe-haven asset gold extended its downside streaks, hitting a new weekly low under $1,835.
EUR/USD was a bit weaker as it broke below the 1.1750 level. This movement took place during a modest rebound of the US dollar, underpinned by its own set of unique market drivers. Analysts note that the recent performance of the euro against the dollar reflects broader economic sentiments and expectations surrounding monetary policy.
In other forex market action, the GBP/USD pair continued to have difficulty bouncing back from past declines, finishing in the red on Thursday. By the end of the week on Friday, the market was still headed further south. It was trading around the 1.3450 handle after UK Retail Sales figures disappointed. Every month, disappointing figures have added to fears that the UK’s impressive economic recovery is starting to run out of steam. This unknown has deepened selling pressure on the British pound.
Gold has seen strong bearish pressure act to dominate the commodities market for the third consecutive day. It sank to a new weekly bottom, falling under $1,835. The yellow metal was dropping as market risk sentiment is improving. This change comes on the heels of news that the United States and China will have a new round of trade talks next week. As a result, this positive monetary policy development has pushed investors to move into riskier assets, putting downward pressure on gold prices.
Surging US Treasury bond yields have played a role in causing gold’s fall, too. In a rising interest rate environment, the opportunity cost of holding non-yielding assets such as gold increases, causing demand to fall. The combination of these factors has created enormous downward pressure on XAU/USD (gold) prices.
This week Ethereum is deep in the red, down almost 3%. Industry-wide market volatility is still rattling the whole crypto space. Ripple has actually suffered even steeper drops, down close to 10% as of this writing this week. These movements underscore the significant pressure cryptocurrencies continue to find themselves under as investor sentiment shifts and the regulatory environment evolves.
The currency and commodity markets are dealing with a very complicated environment right now. Economic data releases, geopolitical developments and changes in market sentiment are greatly impacting their swings. Traders need to rely on fundamentals like these, which are still having rippling impacts on prices across assets.