Weekly Market Review & Analysis: Key Global Events Impact

Weekly Market Overview

Global financial markets experienced notable volatility this week, driven by a variety of geopolitical and economic events. From the fluctuating Dollar Index to the ups and downs of oil prices, and the mixed performance of cryptocurrencies, investors had to navigate a complex and uncertain environment.

Dollar Index

The Dollar Index fluctuated this week, with the 98 level proving crucial. At the start of the week, the Dollar regained some ground after Powell's dovish comments the previous week. However, Trump's announcement of the dismissal of Fed Governor Cook soon caused the Dollar to fall, raising concerns about the independence of the US central bank and expectations of interest rate cuts.

Gold

Gold benefited from the uncertainty created by these events. Driven by concerns about the Fed's independence and political instability in France, gold regained its safe-haven status, returning above $3400 per ounce and on track to record gains for the second week in a row.

Major Currencies

• Euro vs. Dollar: The Euro is expected to record its first weekly decline in four weeks, due to political turmoil in France after the Prime Minister proposed a vote of confidence.
• Pound Sterling vs. Dollar: The Pound fell for the second week in a row, struggling to find support due to uncertainty about the Bank of England's monetary policy direction.
• Dollar vs. Japanese Yen: The Dollar followed the same path as the Dollar Index against the Japanese Yen, rising and then falling.
• Australian Dollar vs. US Dollar: The Australian dollar recorded gains overall.

Oil Prices

Oil prices are expected to record gains for the second week in a row. Prices briefly fell after reports that Exxon Mobil may return to the Russian Far East oil and gas development project, prompting traders to reassess Russian fuel supply forecasts. However, the prospect of a meeting between Russian and Ukrainian leaders continued to diminish, providing support for oil prices.

Cryptocurrencies: Bitcoin and Ethereum

Bitcoin fell sharply this week, falling below $110,000 and is expected to record a decline for the second week in a row. In contrast, Ethereum performed remarkably well, with data showing an increase of more than 17% in the past 30 days, while Bitcoin recorded a negative return of 5.5%.

Key Investment Institutions' Views

• Morgan Stanley expects the Fed to cut interest rates by 25 basis points in March, June, September and December 2026, bringing the final target range down to 2.75%-3.0%.
• Credit Agricole expects the Fed to cut interest rates twice this year, with the final rate at 4%.
• Commerzbank believes that the Fed's independence and rising US debt represent structural resistance to the dollar.
• UBS points out that the politicization of the Fed may lead to three economic risks.
• Citi expects silver and palladium to face high tariffs. Goldman Sachs expects a weaker dollar, but sees limited room for commodity-linked currencies to rise.

Top Weekly Events

Key events this week included Trump's attempt to change the composition of the Federal Open Market Committee (FOMC), renewed calls for interest rate cuts in September, developments in the war in Gaza, escalating Russian attacks on Ukraine, stalled diplomatic efforts on Iran's nuclear program, the US's permanent cancellation of tax exemptions on small shipments, political turmoil in France, negotiations between the United States and South Korea, and developments in major technology companies such as Cambricon, Intel and Meta.

Important Note: This analysis provides information on market performance and economic events. It should not be considered investment advice. Investors should consult a qualified financial advisor before making any investment decisions.