Market news – Week 4, April 2023

On the back of a weak Consumer Price Index (CPI) report (released on Wednesday, 12 April), the US dollar stumbled and launched gold prices up overnight.

Forex

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The EUR/USD pair closed the week at 1.0994 USD, dropping slightly after a high in the middle of the week thanks to a weakening US dollar from cooler-than-expected Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) meeting minutes.

On Wednesday, 12 April, the highly anticipated March CPI data was released, revealing a 0.1% month-on-month increase. The same day, the minutes of the FOMC March’s meeting forecasted a mild recession as well as a chance that there will be one more rate hike in May. The US dollar took a hit, and touched an eight-week low.

Meanwhile, the GBP/USD pair closed the week at 1.2415 USD after small gains throughout the week, and the Japanese yen weakened to just over 132 USD.

This week, eyes will be on the Initial Jobless Claims report that will be released on Thursday, 20 April.

Commodities

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Gold prices closed the week at 2,004.22 USD per ounce after a week of movements affected by the performance of the US dollar.

The precious yellow metal started the week by falling more than 1.0% from the previous week. However, its prices saw an overnight jump mid-week and touched a high of 2,046.79 USD per ounce. A weakened US dollar contributed to the jump, as the dollar fell after the release of below-expected US CPI data and the FOMC March meeting minutes (which showed policymakers raising the interest rate by 25 bps).

Silver also saw a 12-month peak after the release of those data. On the other hand, oil prices closed the week sideways, as they were unable to maintain momentum after last week’s jump following the unexpected output cut announcement by the Organization of the Petroleum Exporting Countries (OPEC+).

Cryptocurrencies

The cryptocurrency markets were trading higher this week, adding to their steady gains as investors raised bets that the US Federal Reserve will soon end its aggressive monetary tightening campaign. The global cryptocurrency market capitalisation currently stands at 1.27 trillion USD.

Bitcoin maintained its consolidation around the 30,000 USD level after reaching a peak of 30,506 USD on Friday, 14 April — its highest point since June 2022. It is currently trading at 30,326.60 USD at the time of writing.

Meanwhile, Ethereum achieved a new 11-month high of 2,120.56 USD on Sunday, 16 April, driving fresh enthusiasm among investors following the successful Shanghai upgrade.

In other news, recent developments suggest that international cooperation for worldwide cryptocurrency regulations may be on the horizon. At the G20 summit, India, which holds the presidency of the group in 2023, proposed a common regulatory framework for cryptocurrencies. Its aim was to address the associated risks while still allowing innovation and growth in the sector.

US stocks

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US stocks experienced mid-week fluctuations when the FOMC March meeting minutes revealed concern over the banking industry’s liquidity crisis, following a lower-than-expected inflation report which hinted at another policy rate hike in May. Both were released on Wednesday, 12 April.

However, all three major US stock indices recovered marginally to close the week in the green. The Dow Jones rose 0.89%, followed by the S&P 500 rising by 0.69%, and Nasdaq with a 0.22% increase.

Last week, major players JPMorgan Chase, Wells Fargo, and Citigroup kicked off earnings season, with reports that exceeded estimates, possibly contributed by fears of the stability of smaller banks reeling from the collapse of Silicon Valley Bank and New York-based Signature Bank last month.

This week, the first-quarter earnings season is in full swing.

Now that you’re up-to-date on how the financial markets performed last week, you can improve your strategy and trade CFDs on Deriv MT5 or Deriv X, or with options and multipliers on Deriv Trader.