US tech stock showed a modest recovery on Friday with NASDAQ 100 gaining nearly 0.63% but despite the gain, the index had its worse month since October 2020. Tech giants including Facebook (FB), Amazon (AMZN), and Microsoft (MSFT) ended the week on the higher side. Friday’s recovery was largely attributed to the long-term US bond yields that sharply dropped after surging all the week. The S&P500 managed to end the month 2.6% higher despite falling 2.5% during the week. In contrast, the Dow dropped 2.6% on Friday and ended the week below 31,000.
Analysts relate the US market sell-off during the week (excluding the tech rally) to the ongoing concerns that the US economy will continue to run hot amid the COVID19 crunch.
In currency, the US dollar remained on the lower side during most of the week but showed a robust recovery on Thursday that continued to the end of the week. The US dollar index (DXY) that tracks the performance of the greenback against a basket of the currency dropped to 89.69 on Thursday paving the way for GBP/USD to hit a multi-year high of 1.4250. But as the US dollar gained towards the end of the week, large sell-offs were seen in GBP/USD resulting in a lower closing at 1.3907. Another reason for the pound’s weakness was due to BOE Deputy Governor’s Dovish remarks about inflation. He noted that the inflation is still below 1% an indication that the UK’s economy is still far from a full recovery.
The EUR/USD had two-way movement throughout the week but as the USD gained it also ended the week lower to 1.2068. By contrast, the USD/JPY remained among the gainer and closed at 106.47 after starting the week at 105.35. The late rebound in the USD also helped the USD/CAD bulls to end the three weeks losing streak and close higher at 1.2726.
In commodities, the Crude oil price rose for a fourth consecutive month despite a slight decline on Friday. Crude oil started the week at $58.93, the news that Saudi’s want to steadily hold the production led to a higher weekly closing at $61.53. In contrast, the Russians wanted to increase the supply however, the OPEC+ meeting in the coming week would be the driving force behind the crude oil price.
Finally, the precious metal Gold ended the week at $1733, the lowest level since July 2020. Gold rose as high as $1812 on Monday but with subsequent recovery in the USD during the week helped bears take control. The rise in the US treasury yield also led the investors to shift focus back to the USD. The Gold price pattern has turned strongly bearish and it appears that a breach below $1700 in the next week would likely extend the downwards move.
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