The EUR/USD was very volatile last week. First, the euro fell to new lows in the 1.1120 region after the Fed meeting showed that (hawkish) officials are uniformly concerned about rising inflation. However, the shared currency rose since Friday, following renewed dollar weakness and improved investor sentiment. German inflation figures showed on Monday that consumer prices rose more than expected in January, providing boost for the oversold euro. The British pound slightly rose against the dollar in a highly volatile market. The political turmoil around UK PM Boris Johnson hasn’t had a great impact on the pound. On the other hand, no big news from the EU-UK talks around the Northern Ireland Protocol provided a breather for the British currency.
The Japanese yen was little changed against the dollar, but very volatile. Overall, the US Dollar Index touched new tops near 97.50 on Friday and then, retreated on Monday and Friday as US bond yields fell across the yield curve.
Gold prices fell steeply after the US Federal Reserve meeting. The prospect of quick and aggressive monetary policy tightening in the US pulled down gold prices.
US stock indexes bottomed on a “hawkish” Fed and rising interest rate environment, but then consolidated and wrote off a big chunk of losses on Friday and Monday. Earnings season is in full swing. Meta Platforms, (Facebook), and Exxon Mobil will report its Q4 results on Wednesday, will Amazon is set to declare on Thursday.
Oil prices rose last week as tensions between Russia and the West over Ukraine underpinned prices. Russia is the world's second-largest oil producer, so fears prevailed that energy supplies to Europe could be disrupted. OPEC's oil output in January has again fallen short of its target to produce 400,000 barrels under the existing deal, highlighting that some producers still struggle to increase output, even as prices rise.