Forex Markets:
The foreign exchange markets witnessed noticeable volatility this week, driven by mixed economic data and statements from global central bank officials. One of the most prominent events was the statement by the Federal Reserve Chairman, indicating a continued cautious approach regarding interest rates, which affected the movement of the U.S. dollar.
Performance of Major Currencies:
U.S. Dollar (USD): Slightly declined against major currencies, especially after inflation data came in below expectations, reducing the likelihood of a rate hike in the upcoming meeting.
Euro (EUR): Rose against the dollar by 0.3% to reach the level of 1.0985, supported by a rise in confidence indicators in the German economy.
British Pound (GBP): Moved sideways in the absence of strong data from the UK, while investors awaited the speech of the Bank of England Governor at the end of the week.
Japanese Yen (JPY): Strengthened as a safe haven amid growing concerns over the slowdown in the Chinese economy, settling at the level of 152.10 against the dollar.
Gold Markets:
Gold prices continued to rise throughout the week, benefiting from the decline in the dollar and increased geopolitical tensions in the Middle East. The ounce reached its highest level of the week at $3,075.20, before closing with a weekly gain of 0.6%.
Influential Factors:
Demand for Safe-Haven Assets: Tensions escalated between the United States and Iran after an incident targeting an oil facility in the Gulf, which increased demand for gold.
U.S. Inflation Data: Came in weaker than expected, supporting expectations of holding or even cutting interest rates in the second half of the year, which boosted gold prices.
Dollar Performance: The slight decline in the dollar during the week increased gold’s appeal to global investors.
Outlook:
Analysts expect uncertainty to persist in the markets, with eyes on the upcoming U.S. Federal Reserve monetary policy meeting. Gold is also expected to remain in the spotlight amid ongoing geopolitical tensions and the slowdown in some major economies’ growth indicators.
