After enjoying a 4-week rally, the dollar came under pressure last week, falling against most of its major peers, leaving many traders questioning whether the most recent bull run is over for the greenback.
Spanish assets under pressure on Catalonia independence rumours; GBP rebounds on decent economic reports; gold remains well supported despite falling 5% from last month’s highs; FOMC speeches eyed after bank holiday weekend.
The pound has stormed back to life at the start of this week, rising from a low of 1.3030 to a high so far of 1.3200 against the dollar. Its rebound comes after a sharp drop at the end of last week, which ensured of the GBP/USD’s third-down close in as many weeks.
Last week at this time we were scratching our heads about how a market can elevate in the face of such tragedy. Arthur Laffer probably put it best when he said on the surface money/markets have little to do with morality. But eventually, morality will catch up to the markets. Markets had a similar sentiment when it came to the hurricanes. Initially, markets were resilient when the hurricanes hit.