The Dollar took a beating as traders leaned away from safe havens, and we also saw a disappointing read from the latest U.S. employment update to cement the Greenback’s status as the “biggest loser” of the week.
And the Comdolls were the big winners in FX, likely on both the positive risk sentiment lean, but also on the massive surge in commodity prices.
Notable News & Economic Updates:
Risk-on Sentiment this week
The global markets showed a broad lean towards risk-on vibes as oil, equities, and crypto assets closed in the green. Even gold was on the upswing this week, likely taking advantage of U.S. dollar weakness, as well as a dip in bond yields.
Contributing to these vibes may have come from a combination of net positive business sentiment updates from around the globe (Global economic growth accelerates to 11-year high as new orders and international trade rise at stronger rates), and possibly on positive developments from the global vaccine front (e.g., Moderna says early data shows Covid vaccine is 96% effective in teens).
We also saw got commentary from central bank / government figures that signaled on net that simulative measures were here to stay for now (Yellen Clarifies Inflation Remark, Sees No Need for Fed to Hike), despite rising inflation figures and as the global economy grows as the pandemic begins to fade.
In the forex markets, the Australian and New Zealand dollars were the big winners this week, likely driven by the net positive reads from around the global economy and vaccine developments/progress, as well as the rapidly rising commodity prices, as shown by the Bloomberg Commodity Spot Index. After dropping to a four-year low in March of 2020, the index has risen 70% since as demand has spike with the pandemic recovery.