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- Stocks swung wildly as the US Federal Reserve announced it may taper this year
- Bitcoin and cryptos endured a weak start of weekly trading but later pared the losses
Another week in the financial markets went by filled with increased volatility and wild swings across asset classes. Trading in stocks, currencies, commodities, and crypto-assets did not come without heightened uncertainty.
The major event of the week was the news that the Federal Reserve is thinking about tapering this year. The minutes released from the July 27-28 Fed meeting confirmed that most members in the Federal Open Market Committee are now in favor of unwinding the easy-money policies that have sustained the upward momentum in stocks for over a year.
The release of the meeting summary on Wednesday afternoon caused investors to scramble while stocks sold off, logging their worst day in over a month. On Wednesday, all three major US indexes closed down by around 1% each.
European Markets Swing Between Gains and Losses
Earlier in the week, on Monday, the 30-stock Dow Jones Industrial Average and the S&P500 finished their fifth straight record-setting session as investors cheered the continued rapid expansion of the US economy. Tuesday, however, snapped the winning streak, and the US stock gauges ended in the red.
Stocks finished the week rather mixed as market participants were still digesting the latest update by the US central bank.
European markets were swinging between gains and losses throughout the week. On Thursday, major bourses in the eurozone slipped by 1.5% or more, while their US counterparts were able to pare morning losses.
In currencies, the US dollar reacted sharply to the upside against the euro shortly after the Fed released its meeting minutes. The EUR/USD slipped to a 10-month low on Thursday, reaching a bottom of 1.1665, a level is last seen on Nov 4 last year.
Digital assets traded lower for the first half of the week. Bitcoin snapped a three-day losing streak on Thursday by sprinting over 5% from its session low. Ether also ended its early-week losing stretch on Thursday by gaining about 4% on the day.
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