The euro fell against the dollar last week hitting a twenty year low as concerns continued over the energy crisis. On Friday Fed Chair Powell spoke at Jackson Hole Symposium. Powell stated there would be pain for households and businesses and signaled that rate hikes would continue until inflation was under control.
The British pound continued to fall as worries continued over the UK economy with analysts predicting a recession which will last a year, amid a cost of living crisis and high inflation.
The USD/Yen traded slightly higher over the week, although the yen also received some safe haven support amid investor worries. This week the pair hit its highest level in a month and is trading close to a 20 year high.
Gold prices dropped again with Friday’s speech from Powell sinking any chance of a pullback seen earlier in the week. Gold received some safe haven support due to an endangered Ukrainian nuclear plant, but the likelihood of a series of sharper rate hikes are putting pressure on prices.
US stocks traded higher throughout much of the week before tanking lower on Friday. Investors were spooked at the prospect of interest rate hikes and the prospect of a prolonged economic slowdown.
Oil prices climbed after reports that armed street battles were taking place in Libya between government and opposition groups. Previous conflict in Libya has seen its oil wells suspend operations. On Friday similar news from Iraq was reported putting OPEC’s second largest producer under threat.