weekly trading recap

Weekly Recap: Coinbase, Dollar Weakness, Inflation

The biggest stories of the April 12 – 16 trading week include the dollar’s second week of decline, Coinbase’s IPO, improved inflation numbers, Bitcoin reaching $65,000, and lowest jobless claims since the start of the pandemic.

It was apparent that the theme for the past week was the increasing appetite for risk-taking in the market. The data of China's strong export growth in March set the tone for the rest of the gains in the Asian markets on Tuesday. This was supported by a slight uptick in AUDUSD, the proxy for global risk, in the first two days of the week, followed by a strong 1.05% move on Wednesday and 0.37% on Thursday.

Chinese retail sales data released on Friday was also positive, soaring  34.2% last month, but didn't do much to lift currency prices. 

Adding more to the market's growing fondness for risk is the S&P 500 that capped off the fourth week of gains along with the Dow. NASDAQ, on the other hand, extended its rally to a fifth week.

Week 2 of a Weak Dollar

U.S. dollar weakness became an overarching narrative for most of the past five days. The U.S. had fairly positive inflation data, with CPI numbers jumping 0.6% in March, the largest since August 2012. Initial jobless claims also improved, dropping to its lowest figures in the pandemic with 193,000. And retail sales exploded to 9.8% from an expected 6.1% due to Americans utilizing their stimulus checks.

However, the greenback kept plunging and completed week 2 of being in the red. Treasury yields were also down and closed at 1.57% on Friday.

Much of the dollar's weakness was attributed to the Fed's stance on keeping rates subdued. Fed Chairman Jerome Powell said on Thursday that policymakers would wait for a complete labor-market recovery and a 2% average inflation over the full economic cycle. But he doesn't expect this until 2022.

Coinbase and New ATH for BTC and ETH

As for cryptocurrencies, both Bitcoin (BTC) and Ethereum (ETH) surged to new all-time highs in the past week. BTC reached $65,000 on Wednesday, while ETH touched $2,548 on Friday. Some analysts have noted that much of the rally behind the top crypto, especially at the initial move to $63,000, was due to Coinbase's listing, which many observers deem as a monumental event for cryptocurrencies in general.

Coinbase's IPO helped it achieved a market valuation of more than $100 billion at one point when it peaked at $429.54 on its first trading day.

Chart of the Week: EURUSD

And, finally, one of the pairs that benefited through a weaker dollar is the EURUSD. If the dollar continues its sluggish trend in the next five days, the fiber might break above the resistance level seen below. And while momentum is tilted to the upside and is not overbought, there is an opportunity for this pair to go higher.

april 12 to 16 2021 eurusd chart

Here's a recap of all the other winners and losers in last week's trading:

  • U.S. dollar -0.70% 
  • BTC -6.86%
  • EURUSD +0.71%
  • GOLD +1.81%
  • AUDUSD +1.54%
  • USDJPY -0.80%
  • GBPUSD +0.99%
  • S&P 500 +1.41%
  • NIKKEI -0.28%
technical chart graphic

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