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- A broad US dollar strength narrated the moves in the currency market
- Bitcoin rallied nearly 20% to reach a five-month high of $55,700
Stocks Wobble, US Dollar Gains
The week was filled with events around the debt ceiling in Washington, persistent inflation worries, and a rallying bitcoin.
To start off the week, traders and investors were largely defensive in their approach to stocks. As a result, the major US equity indexes kicked off the first full week of September with steep declines. Nevertheless, investors managed to balance the volatility and, later in the week, the stock gauges pared their losses.
In the forex market, a strong US dollar defined the week. The EUR/USD slipped to a low of 1.1530, a level last seen in July 2020. In addition, other major pairs experienced increased volatility. The EUR/CAD, for example, slipped throughout most of the week. Furthermore, the exchange rate reached price levels unseen since March 2020 when the Covid-19 hit the financial markets.
Oil Jumps to a 7-Year High
Meanwhile, oil this week spiked to a 7-year high. Brent crude, the international oil benchmark, rallied to over $83 a barrel. The jump arrived when the OPEC+ failed to reach an agreement to boost oil production. Additionally, the countries exporting oil projected demand for the raw material in 2022 will be even higher than pre-pandemic levels.
Bitcoin Rallies on Positive Remarks
Cryptocurrencies, broadly, regained the $2.3tn milestone in market valuation. Furthermore, the main player this week was bitcoin, gaining about 20% to a weekly high of $55,700 per token. In contrast, Ether, the second-biggest digital asset, gained about 6.5% to its weekly peak of $3,639 per coin.
Bitcoin this week received a boost when major finance-centered institutions in the US said they have no plans to ban Bitcoin. In particular, the Securities and Exchange Commission, headed by Gary Gensler, was one of them. The other two, the Treasury and the Federal Reserve, also announced they have no intention to ban bitcoin or the crypto market.
The widely positive stance toward crypto by US lawmakers sparked hopes that regulations will be crypto-friendly. Moreover, once guardrails are introduced, institutional investors looking to join crypto would be able to do so.
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