Weekly Overview: Forex, Stocks, Crypto, Commodities

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Covid-19, with its new variants, remains the hot topic status for every industry, every field. The influence still is strong on the forex, cryptocurrencies, stocks, and commodities markets. Let’s sum up the weekly updates of each sphere.

Forex market weekly overview

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After a few days of turbulence, the U.S. dollar rose for the second consecutive week. At that time, the currency was hit by a shift in risk appetite. The market is now oriented on the Fed meeting next week.

The USD index, measuring the dollar against a basket of currencies, rose 0.2% this week and rose slightly to 92.926 on Friday.

The market has focused on the pandemic again, as the Delta variant has led to new measures to combat the virus

In addition, the Delta variable also highlights the recent slowdown in U.S. vaccination rates.

This may hinder the expected reopening of the economy. At the same time, inflation continues to rise unexpectedly.

Analysts said that they continue to expect the dollar to rise mainly by the end of the year, with the euro/dollar forecast at the end of 2021 at $1.15.

The safe-haven yen fell by about 0.2% this week and finally reported at 110.46 yen per dollar, down 0.3% on the day.

Simultaneously, the euro was flat at $1.1772 during this period. It was unaffected by surveys of purchasing managers from France, Germany, and the entire Eurozone.

The following primary focus of the market is the two-day policy meeting of the Fed that will end on Thursday

Fed officials have suspended mentioning the impact of the coronavirus on the economy since the last meeting on June 16. However, the number of covid-19 cases has extremely surged.

However, many economists still expect this meeting to progress in the discussions on the gradual reduction of stimulus measures.

The pound has regained from a 1.3% fall this week, and the exchange price was almost flat at $1.3741. It was boosted by the recovery in risk sentiment, even though COVID-19 cases generally rose.

Although, the Australian dollar dropped by 0.3% to $0.7360 on Friday and will fall by 0.5% this week, which will be the fourth consecutive week of decline.

Stock market weekly overview

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After a turbulent week, global stock markets rose on Friday. The sentiment of the global economic outlook increased and fell with each new title of the Delta variant of the coronavirus.

Optimistic earnings helped boost European stock markets, while U.S. stock index futures rose due to positive signs of the opening of Wall Street.

However, Asian stock markets outside of Japan were lower as Covid-19 anxiety continued to have an impact.

This week the financial market shifted from one direction to another

The investors tried to assess what the soaring Delta variable means to the world economy.

After recording the most significant one-day drop since May on Monday, the S&P 500 continued to record its biggest one-day gain since March one day later.

It will go higher at the end of the week. Similar volatility has also occurred in currency, bond and commodity markets.

The pan-European STOXX 600 index increased by 0.9%.  The overall weekly growth was 1.2%, the highest level in a month, supported by upbeat earnings.

French auto parts manufacturer Valeo increased sales and profits in the first half of the year, and its stock price rose 8%.

The MSCI Asia Pacific’s broadest index outside of Japan fell 0.7% and fell 1.4% this week.

Japan’s Nikkei Index was closed for a holiday but fell 1.7% this week, just one step away from a 7-month low.

Given the recovery of Delta variables and economic uncertainty, financial markets are expected to continue to fluctuate

The risk appetite of the stock market has eased the demand for safe-haven bonds.

The U.S. 10-year Treasury bond yield increased by 2.5 basis points to 1.29%. It is a much higher result than the five-month low of 1.128% hit earlier this week.

German 10-year bond yields have also increased, which means that prices have fallen. The yield is -0.40%, which is higher than the most recent five-month low.

But the moderate European Central Bank pledged on Thursday not to raise interest rates until inflation continues to reach its new 2% target, which supported sentiment for European bonds.

Crypto market weekly overview

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Overall, Cryptocurrencies don’t have their best-performing period, as the overall price trend is declining.

The transaction price on July 1 was approximately US$33,000, and by July 5, the price of Bitcoin had almost risen to US$36,000.

It fluctuated in the next few days and finally fell below $33,000 on July 9. Another slight rebound rebounded to nearly US$35,000.

However, Cryptocurrencies were widely higher on Friday morning as bitcoin is headed for a weekly gain. Lastly, the current transaction price is slightly higher than $32,000.

Ethereum, the second-largest cryptocurrency by market capitalization, rose 3.5% and traded at US$2,067.

Vijay Ayyar, head of the Asia-Pacific region of Luno, a cryptocurrency exchange, said that Wednesday’s price movement might be a “dead cat rebound”. According to him, digital assets rebound briefly from a long-term decline and then continue to decline again.

Unless Bitcoin can climb above US$32,000-33,000, Ayyar expects it to fall further. Bitcoin might even fall to US$24,000-25,000.

 According to Ayyarm, in general, there are currently many macro factors that cause a risky environment for digital assets

These macro inflator factors are covid-19, inflation, environmental concerns, and new regulatory restrictions in some countries.

Tesla CEO Elon Musk said that the company might start accepting Bitcoin for car purchases again on Wednesday.

After worrying about the high carbon footprint of crypto mining, the company has decided to stop using it.

He said on Thursday that on the same day, Argo Blockchain announced that it had begun building a “green” cryptocurrency mining facility in Texas.

This news might be a massive boost for cryptocurrency prices. They started declining as soon as the famous crypto-promoter, Elon Musk, refused bitcoin-based payment due to environmental concerns.

Making crypto mining eco-friendly and green might cause a massive success for the industry.

Commodity market weekly overview

commodities market

Oil futures decreased slightly on Friday and maintained a weekly decline track. However, it rebounded sharply after Monday’s sharp drop.

West Texas Intermediate crude oil for September delivery on the New York Mercantile Exchange fell 19 cents, or 0.3%, to $71.72 per barrel, causing the U.S. benchmark crude oil to fall by 0.1% weekly.

The global benchmark Brent crude oil fell 26 cents, or 0.4%, to US$73.53 per barrel on the ICE European Futures Exchange in September, a decline of less than 0.1% this week.

Crude oil plummeted on Monday, WTI fell by more than 7%, and there was a widespread sell-off, partly due to concerns about the spread of the delta variant of the coronavirus and its impact on energy demand.

The investors rushed to buy on dips, crude oil, and other assets, including stocks

According to Commerzbank Commodity Analyst Eugen Weinberg, the market rebound confirmed their hypothesis that external factors ultimately trigger the selling.

Weinberg stated that it also supports the expectation that the Organization of Petroleum Exporting Countries and its allies (i.e. OPEC+) to increase production by 400,000 barrels per month while lifting production restrictions will prevent a repeat of last year’s collapse cartel.

The supply situation is still tight, and the agreement emphasizes the unity of OPEC+. So far, the response of non-OPEC+ producing countries to the sharp increase in prices has many shortcomings.

This indicates that OPEC+ will maintain its “pricing power”, which will lead to high prices.

What about the gold?

Gold was generally prosperous in July. Starting from US$1,765, the price of gold rose steadily in the first week of July and reached US$1,812 on July 6.

It then continued to fluctuate between US$1,790 and US$1,820 in the following week and showed a gradual upward trend. It then rose to $1,830 on July 14, 15, and 16, and then fell to $1,800 on July 19.

Although the price soared the next day to US$1,825 again, it has now fallen back, and the transaction price is about US$1,800.

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