Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
COMPARTIR
The situation is much the same as it was at the start of last week. The conflict in Iran continues, disrupting crude oil deliveries out of the region, lifting oil prices to the hundred-dollar mark. The Brent Crude benchmark is currently sitting at $104 per barrel, while WTI is trailing behind at $98. The biggest surprise for many is just how resilient the US dollar has proven to be. The DXY rose to a weekly close of 100.5 last Friday, a level not seen since May of last year. The Euro, which makes up the bulk of the dollar currency index, fell to $1.14 last week, while the Pound Sterling sank to $1.32. On the other hand, the yen is demonstrating a degree of tenacity, refusing to be pushed above 160, at least for the time being.
The strength of the dollar is the dominant force in financial markets at the moment, to the detriment of almost everything else. Stock markets around the world continue to be rattled by current affairs, weighing particularly heavily on US and Asian indices. The Nikkei 225 plummeted a further 3.2% last week, while the Korean Kospi index shed 1.8%. Over in the US, the Dow Jones had lost 2% by Friday, while the S&P 500 and Nasdaq had fallen 1.6% and 1.3% respectively over the course of the week. Precious metals were hit just as hard, if not harder, with gold losing the better part of 3% and closing just above $5,000 per ounce by the weekly close. Likewise, silver, platinum and palladium all lost 5% or more.
In an increasingly strange twist of fate, cryptocurrencies are finally showing signs of life after months of continuous bleeding. Bitcoin gained 10% last week, rising to $72,000 per coin and dragging the rest of the crypto markets along for the ride. JPMorgan chimed in with an interesting take last month, stating that Bitcoin’s volatility relative to gold has dropped to a record low, making BTC “even more attractive compared to gold”. Bitcoin has indeed been a more profitable investment since the comments were made in early February, and indeed since the initial strikes against Iranian targets.
Big week for central banks. The Reserve Bank of Australia will meet tomorrow and is expected to increase rates on the Aussie dollar for the second consecutive time, in large part because of a troubling resurgence in inflation. All eyes will quickly turn to the Fed the following day, as the Federal Open Market Committee convenes on Wednesday to vote on the next course of action for the dollar. The odds of a rate cut are essentially zero; in fact, interest rate traders are not predicting a rate cut until December at the earliest. The Bank of Canada will also meet on Wednesday and will likely hold rates steady on the Canadian dollar. On Thursday, it is the turn of the Bank of England, Bank of Japan and European Central Bank, all of which are expected to enact a rate hold on their respective currencies. Very little is going on with regard to the earnings calendar, with the exception of Micron (MU), which will report after the bell on Wednesday.
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