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U.S. stocks hit record highs but greenback still struggling

In this photo Wall Street Bull.

Stock markets in the U.S. have bounced back this week with some indexes hitting record highs. The dollar meanwhile is still under pressure against global currencies.

Nasdaq Composite posted another record high on Thursday, closing above 11,000 for the first time ever. The rally has been primarily driven by tech stocks which are heavy on the index. The S&P 500 closed up 0.64% for its fifth straight positive day, tapping its highest level for almost six months this week. The Dow Jones Industrial Average also hit a fifth straight day of gains posting a similar percentage yesterday.

stocks nasdaq
Chart – finviz.com.

Tech giants such as Facebook, Apple, Amazon, Netflix, Microsoft, and Google parent Alphabet all advanced this week leading markets to fresh highs.

Additionally, lower than expected weekly jobless claims amid continued hopes for Covid-19 stimulus negotiations worth trillions of dollars, also bolstered markets. The Labor Department said initial jobless claims for the week ending August 1 totaled 1.18 million, the lowest level since the pandemic began, whereas the expectation was close to 1.3 million.

David Bahnsen, founder and managing partner of The Bahnsen Group, fingered the central bank for stimulating markets, commenting;

“It is true there is a distortion because of big tech cap-weighted realities and market multiples being boosted by monetary stimulus. However, it is an eternal principle that GDP looks backward and the stock market looks forward. That simplicity is being exacerbated by the dynamics of big tech and the Fed.”

Stocks in Asia were poised to end to the week slightly lower following increased tensions between the U.S. and China according to reports. Bourses in Hong Kong and Japan traded marginally lower on Friday, while the Shanghai Composite lost 1.5%.

Forex & commodities update

The dollar has failed to regain composure this week in the world of forex. Sustained selling pressure across USD price action subsided as the greenback tried to claw back some of its recent losses.

Cable continued to strengthen with the pair hitting an intraweek high of 1.318 before a slight pullback. However, GBP continues to be hampered by ongoing Brexit woes, in addition to further Covid-19 outbreaks and subsequent re-lockdowns.

Chart – xe.com

Against the Euro, the pair seems to have hit last month’s technical resistance zone and further gains may be slower to materialize. The weekly high for EUR/USD was 1.190 on Thursday but a sharp correction followed. Against the Yen, there has been little action with the pair closing at 105.5 yesterday.

On the commodities front, Gold prices surged to an all-time high of $2,070/oz this week according to the charts. Silver is also performing well, reaching a 7 year high of $28.37, while Bitcoin has reclaimed the $12,000 level this week as investors head to safe-haven assets.

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Author

Martin has been writing on cyber security and infotech for two decades. He has previous trading experience and has been covering the blockchain and crypto industry since 2017. He has previously contributed to Asia Times, Cointelegraph, NewsBTC, Bitcoinist, Cryptoinsider, Beincrypto, and Micky.