On Friday, the foreign exchange and commodity markets were subject to wild swings. The EUR/USD moved down to three-day lows, trading just under 1.1130. This retreat is at the same time a new low in the euro’s long fight against a rising US dollar. By the end of the day GBP/USD was back down to 1.3250. The market proved to have incredible momentum on the buy USD side.
The Greenback reclaimed ground against a broader risk-linked universe, leading to more wide-ranging impactful movements across FX markets. The single currency was under serious pressure throughout the trading day. Yet this highlights the still-constant battles it must undergo against the seemingly-impenetrable American dollar.
In the commodities market, gold took a big hit—plummeting below the $3,800 threshold. The slump places gold on course for its largest weekly decline of the year. It vividly illustrates the spike in market selling pressure. XAU/USD continues to come under pressure as investors take stock of their positions in light of changing market conditions.
At the same time, Ethereum showed a very different kind of activity in the crypto space. On Friday, the price stayed above $2,500, surging almost 100% from a low in early April. It was the highly anticipated ETH Pectra upgrade that triggered explosive upward momentum. In its very first week, it resulted in more than 11,000 EIP-7702 authorizations. Uncertainty about Ethereum’s viability, sustainability and future direction continues amid a debate inside the crypto trading community about what today’s developments mean for the market going forward.
Adding to the mix, the University of Michigan (U-Mich) survey revealed that US consumer inflation expectations increased. This development has the potential to change the trajectory of future monetary policy decisions in a dramatic way. It further complicates ongoing debates over the causes of inflation and the shape of economic recovery.