[Weekly Review] Black Friday brings sad news on new COVID strain and causes market turbulence

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The market's pulse

Gold slides down. 1,790.44 USD (–5609 points)

The U.S.dollar almost set a new record for 2021, but pulled back. 96.07 (+12 points)

Bitcoin dropped more than 9%. 53,967.26 USD (–5,442.74 USD)

Let's take a closer look at how these and other important events affect currency prices, indices, and commodities.

Gold

Market view

Weekly changes: XAUUSD –3.05%

Last week was the worst for XAUUSD in six months. Gold declined steadily all week, and even Friday's intraday rally of 1.50% couldn't prevent the pair from extending the negative weekly totals. The rally was triggered by news from South Africa about the discovery of a new severe vaccine-resistant COVID strain. This information undermined all assets, as new worldwide lockdown could negate all previously reached recovery advantages. The investors rushed to buy 'safe-heaven yellow metal', although this didn't have the lasting impact on the market. XAUUSD weakened and closed Friday at 1,790.44.

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Currencies

Market view

Weekly changes: EURUSD +0.26%, GBPUSD –0.83%, USDCAD +1.17%

EURUSD closed the week at 1.13131. The ECB remained the last major central bank to avoid hawkish moves so far but changed its policy last Friday. The pair has since risen by 1.13% intraday.

GBPUSD declined to 1.33295 by Friday. The British pound sank, leaving the question of a BoE's rate hike open.

USDCAD outperformed all majors currencies again due to the strength of both currencies. The pair is up 4.02% since late October and ended Friday at a record two-month high of 1.27868.

Bullish triggers

Uncertainty is weighing on the markets due to a newly discovered virus. The U.S. dollar index almost reached 97.00 for the current high of 2021 but declined, leaving its weekly change flat. Investors see the main risk in declining global economic activity. The issue of a rate hike next year topped the major central banks' agenda since Friday. The ECB announced a reduction in its bond-buying program at the beginning of next year. Will inflation in the eurozone start to fall from here? EURUSD rose on this news and reached a weekly high of 1.13283.

Crude oil fell 12% on Friday, which is the most significant daily drop since April. Concerns over a rebound in global oil demand affected the market. In USDCAD, both sides of the currency pair rose and strengthened by 1.25% on news of the coronavirus.

Bearish triggers

However, Friday news hit the U.K. economy hard. The country had to impose travel restrictions from the SAR and neighbouring states. The leading country's stock exchange index showed the strongest slowdown in a year. Traders expected the Bank of England to be the first among the major central banks to raise rates. However, the regulator is unlikely to do so if a possible lockdown could sweep away all the previous economy's advantages. Thus, GBPUSD declined as investors scaled back their opportunities on the Bank of England's rate hike in December.

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Cryptocurrencies

Market view

Weekly changes: BTCUSD –9.21%

BTCUSD fell another 9% on the discovery of a new COVID strain. Bitcoin's volatility has brought the pair down from an all-time high of 69,081.68 reached in mid-month. Investors became concerned about the possible virus spread and reduced their risk-on appetites. The pair closed the week at 53,967.26, and the bearish sentiment is likely to prevail early next week.

Upcoming news

The remaining days of November bring us the German HICP and Canadian GDP reports. The last month of 2021 will start with the German Retail Sales and Manufacturing PMIs in the U.S. But all eyes will be on the current Friday's NFPs. This report is one of the most anticipated events of the month, and its data will directly impact the Fed's agenda meeting in mid-December.

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