London, UK, 4th Oct 2021, – FinancialCentre broker, Chris Fisher says that the dollar is sliding near its lowest level in a week, and it’s not helping that worries about contagion from China have eased. As stocks rose on Friday morning due to improved risk sentiment outweighing recent concerns over Ever Grande Group default fears; people are starting to take notice of what happened with JP Morgan earlier this month when they lost $2 billion dollars because customer funds got mixed up between their own trading accounts as well as Bear Stearns’ hedge fund investments among other things–this time around there will be no bail-out!
Just as was mentioned in “July 19, 2012: No Contagion–Just the Facts Please”, it would be very unlikely to see contagion or even spillover effects gave that there are no financial ties between Bear Stearns and JP Morgan. Even if JPMorgan Chase & Co (NYSE: JPM) were to end up taking heavy losses due to the subprime exposure of Bear Stearns Hedge Funds, once again there will be no bailout like there was back then. It is only normal that there should be some effect on JPM considering they took over Bear Stearns for $2 a share; however the extent of this damage is quite uncertain at this point.
Global markets are on an upswing after oil prices rose and the Bank of England announced its intentions for interest rates. 10-year U.S Treasury Notes reached a high as well at 1:437% overnight, which was not seen since July 2017 when mortgage lending restrictions were put in place due to risk appetites returning from last year’s economic crisis
The United States’ economy has been growing steadily without much volatility throughout 2018 but many worry that rising inflation could bring about another recession if it continues into next year causing investors to look elsewhere where they see greater potential returns like international stocks or gold bars. Overall, the U.S. economy has been improving, but there is still much room for improvement due to lack of investment funding (which was demonstrated by JPM’s absence in the recent weeks), high household debt, and other issues like climate change which may cause greater damage to the economy moving forward.
Overall, people are worried about whether or not these economic problems will spill over into 2019; however for now it appears that markets are having a short-term rebound.
The U.S Dollar Index, which tracks the value of Dollars against six major rivals (including China Yuan), fell to 93 on Friday; this is a decrease from Wednesday when it touched an all-time low and set up for another 0%.
The dollar lost ground after Trump’s Tariffs were announced last week by 3%, but rose back 1% following word that Canada would be exempted “for now”. This might not seem like much – even though these fluctuations can have big impacts in certain markets around the world-, but they show how quickly things change at the whim of the United States’ president.
Another cause for the dollar’s downside is the speculation that Trump will accuse China of currency manipulation at the upcoming G20 Summit. This would put a halt to their currency strengthening and give U.S investors more reason to worry about a downward trend for their currency until they can take back control over it.
Overall, things look pretty bad for the US Dollar as there are quite a few issues going on right now causing it to drop below 93 even though most experts predicted that it would go up during this time period due to Trump’s Tariffs increasing demand for USD.
The dollar was down slightly after earlier reaching its weakest level since September 8th. The euro reached a one-month low of $1.16835 and is currently trading at just below this value, while Aussie has also appreciated by 021%. Sterling rose towards the previous session’s high for the first time in over two weeks as demand from abroad continues to ebb against it; meanwhile, economic data out today should give us more insight on where things stand going into tomorrow’s monetary policy meeting!
As for commodity markets, oil prices edged higher and gold bars jumped to a one-week high as U.S. sanctions against Iran started to bite! Copper also rose after reaching its lowest level since November 14th on Wednesday; however, the CRB Commodities Index fell 1% for the week as other commodities dipped as well.
Investors should be aware that these markets change very quickly and there is constant noise which makes it hard to tell what’s really going on unless you’re following specific investments or watching global events closely.
What we can say though is that investors are still nervous about potential consequences caused by rising inflation and a possible recession in 2019 according to a risk appetite index from Wells Fargo/Gallup.
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