The shared European currency declined after the EU faced criticism due to its slow response to vaccinate its citizens. The dollar on the other hand has been volatile as investors have sought a safe haven due to recent market upheaval connected to a battle between retail investors and institutional investors represented by investment banks.
The British pound traded in a very choppy fashion over the week with big price swings, but ended only slightly higher. The pound hit a more than two year high, supported by the UK’s vaccination program which has a successful in comparison to the vast majority of other countries. The bank of England meets on Thursday to set interest rates, which are expected to remain unchanged.
The Japanese yen was sharply lower over the week with the trend appearing to continue so far this week. The yen has been pushed lower by now confirmed fears about a one month extension to the state of emergency. Japanese Prime Minister Nishimura confirmed the move on Tuesday.
The dollar index meanwhile experienced volatility and climbed over the week. Higher bond yields, risk aversion by nervous investors and no signs of progress in Democratic and Republican discussions over Coronavirus aid supported the Greenback.
US stock indexes fell last week and the S&P500 also saw the biggest losses in one day of trading for three months. Volatility has been caused by concerns over the delayed rollout of vaccines and a battle between retail investors gathered around a reddit group online and institutional investors, represented by investment banks and brokerages. However, the successful earnings season continues with Apple and Facebook last week declaring big beats. This week Amazon, Alibaba and Google will reveal their results.
Gold prices were little changed but showed high volatility throughout the week. A rising dollar and an unclear path for a Coronavirus stimulus bill in Congress is capping the precious metal.
Crude oil prices fell slightly last week despite positive inventories data on Wednesday. Overall volatility in the markets last week had traders on edge, combined with vaccine distribution issues undermining oil. However, on Tuesday this week Crude oil broke out to a more than one year high.