The passing week, although full of uncertainty and local volatility, has not yet brought about significant percentage changes in many asset classes compared to the previous week. Most week-on-week changes seem small compared to the scale of the epidemic.
The US dollar, mentioned in the title, seems to gain 0.7 percent this week and seems the strongest of the major world currencies. As a result, the U.S. currency is making up for the losses it suffered in the previous two weeks quite quickly. This may involve continuing uncertainty and waiting for decisions on the aid program for the U.S. economy, the timing of its launch and the amount that will be used to help households and businesses. The US dollar may also benefit from the weakness of other currencies as infections and further restrictions in Europe increase, uncertainty persists over the UK's trade agreement with the European Union and brexit, and the PBoC (People's Bank of China) is trying to depreciate the yuan. Meanwhile, in the US, President Donald Trump has announced that there will be no lockdown.
The stronger dollar does not seem to favour the gold or silver markets. Metals that are quoted on global markets in the US currency may lose value. This week, gold is experiencing a decrease comparable to the scale of USD appreciation. We are talking about a decline of less than 0.6%. Silver, which seems to be falling by almost 2.4%, has lost much more this week.
In the field of energy commodities, both crude oil and natural gas have increased by slightly more than 1 percent, although NAT GAS is already at its highest levels since early 2019.
Meanwhile, the stock exchange indices, despite the ongoing earnings season in the US, the growth of infections and restrictions in Europe or the lack of a rescue plan for the US economy, have changed little in weekly terms. The S&P 500 index is on a weekly basis where it closed last Friday. The Nasdaq 100 index is 1.5 percent higher, while the German DAX index is 2 percent below last week's levels.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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