Foreign contact Friday currency market was rudderless Friday with significant dollar moves in both directions. The EUR/USD currency pair was under light bearish pressure and trading below the 1.1750 level in the second half of Friday’s session. This decline comes against the backdrop of a modest rebound in the US dollar, part of a bigger picture of currency volatility. The GBP/USD currency pair dropped unexpectedly to the 1.3450 region. That drop followed some disappointing UK retail sales data and contributed to a bearish outlook for the British pound.
The EUR/USD fell under 1.1750. This drop came on the heels of a small rebound in the dollar, fueled by improving economic optimism. The euro is in an existential crisis. Today, it is losing the battle to defend its value against the US dollar. So, as Friday progressed investors were playing the game of positioning themselves ahead of important economic indicators that are on the way.
The Pound to Dollar exchange rate GBP/USD resumed its climb towards parity on Friday after a close in the red Thursday. Additionally, the new pictures paint a grim image for the UK economy as retail sales figures disappointedly plummet. The extent of this disappointment has increased fears over consumer spending, resulting in further selling pressure on the pound. On Friday GBP/USD came close to 1.3450. Market players were equally eager to seize on anything new to tip the balance and move the currency’s direction.
Gold shares crashed for the third consecutive session in bullion and commodities markets. It made new weekly low reaching below $1,835. The precious metal’s decline can be attributed to several factors, including rising US Treasury bond yields and an overall improving risk mood among investors. As the next round of trade talks between the US and China looms, investors have developed a renewed appetite for risk. Consequently, investors are gravitating to riskier assets away from traditional safe havens such as gold.
Sharply rising yields on US T-bonds greatly fuelled the gold bearish sentiment. That’s because rising yields generally make non-yielding assets – such as precious metals – less attractive. With investors returning their gaze back to equities and other risk assets, gold will have a firm headwind keeping its price buoyed.
Ethereum is down almost 3% this week. Multi-Coin Management’s dramatic fall reflects the larger tumult in the crypto space. At the same time, Ripple has experienced an overall larger loss of almost -10% over the same period. These movements provide a key lesson of a developing cryptocurrency space where market participants scramble to respond to changing sentiment and new regulatory news.
In sum, the interplay of currency fluctuations and commodity price movements paints a nuanced picture for investors. Recent high-level diplomatic engagements between the US and China have helped support the improving risk mood. Consequently, our market participants are cautiously optimistic about future economic conditions.