The euro dollar currency pair was trading lower last week. While the pair did spike higher briefly on weaker than expected US inflation data, the Euro continued to sell off against the dollar as US treasury yields approach 2022 highs.
The British pound fell against the dollar as US treasury yield spikes continued to drive dollar strength. GDP in the U.K did come higher than expected, but the data couldn’t stimulate an appreciation in the pound.
The USD/Yen pair extended its rally further as the likelihood of an intervention by the Bank of Japan become less and less likely. Despite the bank announcing a new limit to its yield intervention policy, it added the caveat that the move was only a tweak, and there would be no major changes to policy.
Gold prices sold off sharply, testing its lowest levels since early July. The selloff is largely due to unexpected strengthening of the US dollar, which was widely expected to weaken on the back of weaker than expected US inflation last week. However, the yield spikes in the US strengthened the dollar and piled negative pressure on the precious metal.
US stocks were mixed, with the NASDAQ and the S&P seeing a two-week selloff, while the Dow Jones showed some more resilience, stabilizing after a week. While inflation in the US did come in lower than expected, weaker than expected export data in China sparked concerns of a worsening global economy.
Oil prices ended slightly lower last week, registering its first week in the red after 6 consecutive weeks closing in the green. Regardless of the slight decline, prices are still expected to rise, after OPEC issued its monthly report, suggesting strong demand is expected to continue into the end of the year.