Markets Week Ahead: Nasdaq 100, US Dollar, AUD/USD, RBA, GBP/USD, BoE
Market sentiment mostly improved this past week as all eyes were on the tech-heavy Nasdaq Composite as it soared about 3.7%. Earnings from Facebook, Amazon, Apple and Google – part of the FAANG group – smashed expectations. The Dow Jones Industrial Average was left behind, ending the week -0.16% as the S&P 500 rose +1.73%. The haven-linked US Dollar sank further.
Meanwhile the Federal Reserve left interest rates unchanged at near-zero levels with aggressive measures of unconventional stimulus to remain in place for the foreseeable future. A combination of these developments may have kept markets jubilant despite what has been rising cases of the coronavirus and deaths around the world. The government ended the week without a stimulus deal.
Earnings season remains in play as certain financial, automotive, energy, media, healthcare and other businesses report. From developed nations, the Reserve Bank of Australia and Bank of England will have their next monetary policy announcements ahead. But the focus for the Australian Dollar and British Pound may be elsewhere with central banks in a dovish hold for now.
At the end of the week, all eyes will turn to the next jobs report from the world’s largest economy to continue gauging overall growth expectations. The Canadian and New Zealand Dollars will also have to contend with local jobs data. Lately, precious metals – such as gold and silver – have been rallying aggressively. Will these trends continue?
The Australian Dollar looks set to extend gains against its major counterparts ahead of the RBA interest rate decision
Dollar weakness undermines USD/MXN performance as coronavirus cases continue to spook the market
US Treasury real yields currently trade at, or close to, a record low, boosting the attraction of gold and underpinning any potential move lower.
The US Dollar may extend its losses as demand for the haven-linked asset dwindles amid strong corporate earnings from large-cap firms and uninterrupted support from the Fed.
Crude oil prices may be torn between rising demand from the US and China as OPEC+ begins restoring output. Will the non-farm payrolls report give more life to WTI and Brent?
As the peak of earnings season fades into the rearview, equity markets will shift their focus back to more traditional economic data and possible election uncertainty in the United States.
EUR/USD has now gained ground for six successive weeks, taking it back to levels last seen in 2018, and there is still no sign of its advance tiring.
The extreme reading in the Relative Strength Index (RSI) may be accompanied by higher gold prices like the behavior seen earlier this year.
S&P 500 edging towards critical support, FTSE 100 makes bearish break heading into an seasonally unkind month
USD/JPY rose sharply on Friday, but there are doubts as to whether it is a sustainable move.
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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