As the new week kicks off, investors are on high alert due to escalating tensions between Iran and Israel. With no major economic data releases scheduled for Monday, market sentiment will drive financial markets.
The US Dollar Index (DXY) saw a slight dip on Friday after a three-day rally, hovering around 103.00 in early European trading. Meanwhile, the 10-year US Treasury bond yield is inching towards 4% following a positive end to last week. US stock index futures are mixed as caution prevails.
US Dollar Price Movement in the Last 7 Days
The table below shows the percentage change of the US Dollar (USD) against major currencies over the past week. The Australian Dollar emerged as the strongest performer against the USD.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | 0.32% | 0.41% | -1.03% | -1.11% | -0.97% | 0.98% |
Israeli forces are on high alert after Hezbollah reportedly launched rockets towards northern Israel over the weekend in response to the tense situation.
In Germany, the Wholesale Price Index rose by 0.3% in July, surpassing market expectations. EUR/USD remains steady above 1.0900 on Monday.
GBP/USD experienced weekly losses despite a brief rebound last week, trading above 1.2750 currently. Key UK economic data releases are expected mid-week.
USD/JPY is range-bound above 147.00 as the week begins.
NZD/USD continues its upward trend above 0.6000, with the Reserve Bank of New Zealand announcing policy decisions later in the week.
Gold holds steady around $2,440 amid geopolitical tensions, following modest gains at the end of last week.
Risk Sentiment FAQs
Understanding “risk-on” and “risk-off” market dynamics:
- In a “risk-on” market, investors are optimistic, favoring riskier assets.
- In a “risk-off” market, investors seek safety, opting for less risky assets.
- During “risk-on” periods, stocks, commodities (excluding Gold), and certain currencies tend to rise.
- During “risk-off” periods, bonds, Gold, and safe-haven currencies like JPY, CHF, and USD see gains.
- Currencies like AUD, CAD, NZD rise during “risk-on” periods due to commodity demand.
- USD, JPY, and CHF are favored in “risk-off” scenarios for their safe-haven status.
By monitoring these trends, investors can navigate market volatility and make informed decisions to protect and grow their investments.