This week witnessed significant shifts in global financial markets, with a variety of factors influencing the performance of different assets. Among these factors are critical US economic data releases, trade policies pursued by President Trump, and the ongoing changes in interest rate expectations from the Federal Reserve.
The Dollar Index initially rose, fueled by trade agreements between the United States and the European Union, better-than-expected US economic data, and the interpretation of Federal Reserve Chairman Powell's comments as hawkish. However, weaker-than-expected non-farm payroll data on Friday led to a sharp dollar decline, reducing its weekly gains.
Gold was initially negatively impacted by the strong dollar, but it rebounded strongly after the weak jobs data, offsetting its previous losses and recording slight gains over the week.
Other major currencies experienced similar volatility, declining against the strong dollar earlier in the week before partially recovering at the end of the week.
Oil prices rose, driven by optimism about de-escalation in global trade tensions and Trump's announcement of a ceasefire deadline in Ukraine. However, prices fell at the end of the week following news of a potential increase in OPEC+ production.
US stocks declined significantly this week, influenced by threats of new tariffs on several countries. The Dow Jones Industrial Average recorded its worst weekly performance since early April.
Analysts' opinions diverged on the future outlook for the dollar and interest rates. Some believe that the dollar's rise may be temporary, while others believe that the Federal Reserve may delay interest rate cuts. Some also pointed to increasing interest from foreign investors in the Chinese market.
Important Note: This analysis provides an overview of the economic and political events impacting the markets and does not constitute investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
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