Oil prices continued to slip after reduced demands from China, as the country attempts to contain Covid-19 outbreaks. Meanwhile, major cryptocurrencies showed signs of recovery after the bear run triggered by the collapse of FTX — a leading cryptocurrency exchange.


Forex Chart on Deriv

Source: Bloomberg. Click to see full size.

The euro outpaced the US dollar over the week. This is because the US dollar fell in value following the release of the Federal Open Market Committee’s (FOMC) 23 November meeting minutes, which indicated that rate hikes might pause in the near term. Furthermore, the committee believes that the monetary policy is nearing a “sufficiently restrictive” level. 

The pound sterling’s multi-week comeback continues, aided in part by a lower US dollar. It has now recovered all the losses it suffered as a result of the tax policy moves of the Liz Truss government.

Due to the lessened volatility in the United States as a result of the Thanksgiving break, the Japanese yen closed the week on a high note. The USD has been under pressure since the release of the FOMC minutes, which underlined the US Federal Reserve’s policy of slowing its interest rate hikes.

The Personal Consumption Expenditures (PCE) price index —  which captures inflation across a wide range of consumer expenses and reflects changes in consumer behavior — and November’s non-farm payrolls (NFP) statistics are due this week. Plus, the US Fed is currently altering its pace carefully as tightening pushes its way into the economy with delays. Still, rosy data may easily make the Fed maintain its current course.

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Commodities Chart on Deriv

Source: Bloomberg. Click to see full size.

Oil prices fell for the third week in a row as investors worry about decreasing demand in China, where Covid restrictions are being reinstated due to an increase in the number of infections.

Oil was further depressed as European officials were unable to agree upon a price cap for Russian oil despite debating a level deemed more generous. The lack of agreement means that the Kremlin wouldn’t be adversely affected when it comes to limiting its exports and production, which could negatively affect oil prices.

Meanwhile, gold gained traction after the previous week’s downward correction, helped by renewed US dollar weakness and declining US Treasury bond yields.

This week’s focus will be on coronavirus news from China. If it continues to tighten restrictions, gold and oil may fall.

Non-farm payrolls (NFP) are predicted to decline by 30,000 after growing by 261,000 in October. A dismal performance is expected to weigh heavily on the US dollar, opening the door for a bullish XAU/USD. A positive NFP surprise, on the other hand, should have an opposite effect on financial markets, which may cause gold prices to fall.


Bitcoin Chart on Deriv

Source: Bloomberg. Click to see full size.

Cryptocurrency values remained relatively stable over the past week, with major tokens posting small increases as well as losses. The global crypto market capitalisation stands at USD 820 billion at the time of writing; it had slipped below USD 800 billion last week.

Bitcoin, the world’s largest digital currency, has increased in value by 4% over the last week, and is currently trading at around USD 16,420. Meanwhile, Ethereum is currently trading at USD 1,193 after reaching a high of USD 1,205 on Saturday.

As opposed to the trends in other major digital currencies, meme-inspired cryptocurrency Dogecoin (DOGE) surged 35% over the last week. The short-lived price surge was fueled by Elon Musk’s confirmation that he intends to integrate payments into Twitter 2.0. Musk has frequently used his Twitter account to express views on Dogecoin.

Meanwhile, Binance — the world’s largest cryptocurrency exchange — has established a new website to elucidate its Proof of Reserves System (PoR) in order to prove that it holds client assets in full as a digital currency keeper. Explaining PoR, Binance in a blog post stated, “[T]his means that we are showing evidence and proof that Binance has funds that cover all of our users assets 1:1, as well as some reserves.” It added: “When a user deposits one Bitcoin, Binance’s reserves increase by at least one Bitcoin to ensure client funds are fully backed.” 

The move comes in the wake of the collapse of its crypto exchange rival FTX, which had a significant portion of its assets backed by its own FTT coin. This revelation, when brought to light, precipitated FTX’s collapse. Binance’s move will assure investors of their crypto investments and will likely stabilize digital currencies. 

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US stock markets 

Name of the index

Friday’s close *Net change *Net change (%)
Dow Jones Industrial Avg (Wall Street 30) 34,347.03 +152.97 +0.45
Nasdaq (US Tech 100) 11,756.03 -82.69 -0.70
S&P 500 (US 500) 4,026.12 -1.14 -0.03%

Source: Bloomberg 

*Net change and net change (%) are based on the weekly closing price change from Friday to Friday.

The holiday-shortened trading week was closely speculated on by traders as they watched the rising Covid-19 cases in China and the Black Friday sales numbers. Overall, stocks gained momentum after last week’s downward turn. 

However, on Friday, 25 November 2022, Nasdaq felt the pressure from Apple Inc., which fell around 2% after news of reduced iPhone shipments broke out. The fall in supply was a direct result of the rising Covid-related worker unrest in China.

Last week, the Dow Jones Industrial Average rose 152.97 points, or 0.45%, to 34,347; the S&P 500 lost 1.14 points, or -0.03%, to 4,026.12; and the Nasdaq dropped 82.69 points, or -0.70, to 11,576.

This week, traders face a deluge of economic releases as Wall Street prepares for the US Fed’s final interest rate decision for the year in December. The economic calendar in the coming days will be marked by the release of several reports, including the monthly employment report, housing market report, gross domestic product (GDP) data, and Consumer Confidence Report (CCR), among others. 

On the inflation front, traders would be keen on the PCE price index, which is due on Thursday.

Now that you’re up-to-date on how the financial markets performed last week, you can improve your strategy and trade CFDs on Deriv MT5.


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