Investing.com – Take a peek at the top 4 things that rocked U.S. markets this week.
Draghi sparked a euro rally
EUR/USD hit a two-year high this week, after expectations grew that the European Central bank was edging closer to tightening monetary policy, following ECB president Mario Draghi’s comments that policymakers would decide on tapering stimulus in October.
Mr Draghi, however, attempted to curb the strength of euro, saying that the currency’s strength “represents a source of uncertainty which requires monitoring with regard to its implications for the medium term outlook for price stability”.
Draghi’s comments came after the ECB kept rates at record lows and confirmed that asset purchases would continue at least until December.
Bitcoin bulls pegged back after China’s quick one-two regulatory combo
China’s move to ban the use of initial coin offerings to raise funds earlier this week sent shockwaves through the cryptocurrency market as Bitcoin dipped below $4,000.
After a sharp rebound from the earlier slump, Bitcoin looked set to test its recent high of $4,911, however, the popular digital currency’s rebound came to an abrupt end following a report that Chinese regulators were planning to shut down local cryptocurrency exchanges.
The financial news site Caixin reported that the Chinese government is considering banning key cryptocurrency exchanges in China which would leave many Chinese citizens unable to use exchanges to buy cryptocurrencies like bitcoin.
Crude oil inventories rose for the first time in 10 weeks
Crude oil fell more than 3% on Friday but strong gains earlier in the week offset the slump in Friday, helping crude oil futures avoid a sixth-straight weekly decline.
Investor optimism, however, remained subdued as refinery activity is not expected to return to normal at least until the end of September while concerns over the impact of Hurricane Irma on oil demand persisted, after Irma made landfall in Florida on Friday.
The lower refinery activity weighed on crude demand as data from the Energy Information Administration on Wednesday showed stockpiles rose for the first time in ten weeks.
Gold surged to 1-year highs
Gold continued its recent trend higher rising to a one-year high Friday to post its third-weekly gain boosted by a tumble in the dollar to a thirty-two-month low against its rivals as rate-hike expectations eased following dovish comments from Fed officials earlier in the week.
Minneapolis Federal Reserve Bank President Neel Kashkari said the Federal Reserve’s recent interest rate hikes may be slowing inflation and inflicting “real harm” on U.S. economic growth.
"Maybe our rate hikes are actually doing real harm to the economy," said Kashkari.
Kashhkari comments echoed that of Federal Reserve Governor Lael Brainard, who urged the U.S. central bank to delay raising interest rates until the trend of slowing inflation improved.