Weekly Recap: 24-28 May

The US dollar was able to end last week higher against most of the major currencies after strong US data.

The yellow metal also fell to $1,890 an ounce on Friday, down from a 4-month high of 1910 on May 26.

Coronavirus cases are slowly declining, and the US and UK continue to show strong growth, and Europe is showing improvement. We take a comprehensive look at the highlights of the past week.

USD

The dollar gave up its gains from early trading Friday, May 28, as traders focused on revising their positions ahead of the end of the month and the weekend and after economic data confirmed expectations of US inflation and the recovery from the Coronavirus pandemic.

The dollar index rose as much as 0.4%, recovering from a four-and-a-half-month low, which it plunged to on Tuesday, and then settled little changed during the week at 89.9, closings it at 90.06.

The dollar rose against the yen in early trade today and reached its highest level in seven weeks but gave up its gains later. The US currency reached about 109.77 yen, at its latest price, after rising to 110.2.

Bitcoin

Cryptocurrencies struggled to recover as their sell-off at the end of the week eased due to signs of Chinese scaling down of cryptocurrencies.

Bitcoin surged to $37.391 after declining around 8% the day before. While Ethereum jumped more than 10%.

Bitcoin prices fell 8% Friday and have plunged about 36% in May — their worst monthly performance since September 2011.

A steady torrent of bad news has sent bitcoin spiraling downward since it hit an all-time high above $64,000 in April.

Oil

Oil prices rose last week, supported by strong US data that offset investor concerns about a possible increase in Iranian supplies.

Brent crude rose 25 cents to $69.12 a barrel, and US West Texas Intermediate crude, rose 34 cents to $66.55 a barrel.

According to data from the Labor Department, the number of Americans filing new claims for unemployment benefits fell more than expected last week.

The US economy is gaining momentum, as is recorded in the first quarter, the second-fastest pace of growth since the third quarter of 2003, and other data today showed an acceleration in corporate spending on equipment in April.

Iran and world powers have been negotiating in Vienna since April to find the steps that Tehran and Washington should take to lift sanctions imposed on Iran, which include the energy sector, in exchange for Tehran’s commitment to curbs on its nuclear activity.

Gold And Metals

Gold prices settled below the critical level of $1900 an ounce Thursday, May 27, amid a decline in US Treasury yields, in exchange for strong data that showed the continued recovery of the US economy.

US gold futures fell 0.3% to settle the settlement price at $ 1898.5 an ounce.

Palladium rose 2.3% to $2806.67 an ounce, while silver advanced 0.5%, recording $27.83, and platinum fell 1% to $1,178.86 an ounce.

The major producer of palladium, Nornickel, said the metal market deficit could worsen in 2021.

Turkey

Turkey’s president has fired one of the deputy governors at the country’s central bank, the third senior official to be dismissed in two months in a series of interventions at the nominally independent institution that has unnerved investors. Erdogan issued a decree in the Official Gazette in the early hours of Tuesday dismissing Oguzhan Ozbas, a member of the monetary policy committee, and replacing him with Semih Tumen, a presidential adviser and a professor of economics at TED University in Ankara, according to financial times.

Calendar

In Germany, GDP declined in the first quarter, with a reading of -1.8%. France’s economy posted a slight decline of 0.1% in Q4.

Bank of England member Gertjan Vlieghe suggested that a rate hike could be on the table as soon as early next year. This sent the pound sharply higher on Thursday.   

As measured by the Consumer Price Index (CPI), inflation in Germany edged higher to 0.7% (preliminary) on a monthly basis in April from 0.5% in March. On a yearly basis, the CPI rose to 2% from 1.7%.

The United States’ Real Gross Domestic Product (GDP) expanded at an annual rate of 6.4% in the first quarter of 2021, the US Bureau of Economic Analysis second estimate showed on Thursday. This reading matched the initial estimate and came in below the market expectation of 6.5%.

There were 406,000 initial claims for unemployment benefits in the US during the week ending May 22, the data published by the US Department of Labor (DOL) revealed on Thursday. This reading came in better than the market expectation of 425,000 and followed the previous print of 444,000.

The Consumer Sentiment Index in the US declined to 82.9 (final) in May from 88.3 in April, the University of Michigan’s latest Surveys of Consumers showed on Friday. This reading came in slightly higher than the flash estimate of 82.8 and matched the market expectation.

Coronavirus

German Health Minister Jens Spahn said that Germany would impose stricter controls on centers for conducting Corona examinations after reports from local media accusing some centers of accounting fraud.

“More random reviews will be done,” Spahn said on Twitter. Practical action is essential these days. Those who take advantage of this should not be allowed to do so.”

On the other side, The Saudi Press Agency said that the Kingdom decided to allow entry to it from 11 countries after lifting a ban it had imposed to limit the spread of the Coronavirus, but “with the implementation of institutional quarantine measures.”

The agency quoted an Interior Ministry source as saying that entry from the UAE, Germany, the United States, Ireland, Italy, Portugal, Britain, Sweden, Switzerland, France, and Japan will be allowed from Sunday, May 30.

On the other hand, Britain recorded more than three thousand new injuries and 6 deaths on Sunday, May 30, less than the number of injuries recorded the day before.

And Public Health England said that the total number of people who received the first dose of vaccines against the Coronavirus rose to more than 39 million and 259,000 people.