The U.S. Dollar Index weakened significantly this week, plunging sharply midweek following news that the U.S. Treasury would expand the scale of its long-term Treasury repurchases. It fell below the 99 mark for the first time since June, hitting a low of around 98.56. With market attention focused on the U.S. budget deficit, long-term debt pressures, and changes in the interest rate path, the dollar’s appeal as a safe-haven asset has diminished somewhat.On Friday, the U.S. Dollar Index closed at 98.85.
Spot gold performed strongly this week, briefly breaking through the $4,600 per ounce psychological barrier and hitting its highest level since late May; on Wednesday, it rose by more than $180 in a single day.Key factors driving the market included a weaker U.S. dollar, a temporary pullback in U.S. Treasury yields, and concerns over fiscal risks stemming from the U.S. Treasury’s expansion of Treasury repurchase agreements. Meanwhile, ongoing tensions in the Middle East bolstered safe-haven demand.On Friday, spot gold closed at $4,603.25 per ounce, up 5.2%, marking its third consecutive week of gains.
International oil prices rose overall this week, driven primarily by risks to navigation in the Strait of Hormuz and supply concerns stemming from U.S. threats of further economic sanctions against Iran.Early in the week, escalating tensions in the Middle East briefly pushed oil prices up by more than 3% in a single day. The market then shifted its focus to news such as the U.S. military opening a shipping lane, causing oil prices to consolidate briefly; however, the escalation of sanctions once again drove up the risk premium.
U.S. stocks experienced a volatile decline this week, with the three major indices under overall pressure. The Dow, S&P 500, and Nasdaq all posted losses. Although there was a slight rebound on Friday, for the week as a whole, the Dow fell 0.85%, the S&P 500 dropped 1.43%, and the Nasdaq declined 2.05%.U.S. quantitative hedge funds suffered their worst single-day drawdown of 2023 this week. Among individual stocks, Moderna surged as much as 176.9% in a single day on the back of major news; Walmart fell 9% in a single day due to earnings performance and market expectations, becoming the main drag on the consumer sector.