Spreadex Market Update

Dollar tanks, gold soars as investors focus on US-China tensions



Ignoring the geopolitical reasons that has driven some investors towards gold – which spent Monday hitting all-time highs – the Dow Jones jumped after the bell.

The Dow’s 135 point increase – sending it back across 26600 – and gold’s rise do have a shared origin. The market’s fears over escalating tensions between the US and China, as well as the ongoing domestic disaster that is Trump’s handling of the covid-19 pandemic, has seen investors dump the dollar en masse.

So much so that the pound – hardly a safe bet as the UK hurtles towards a no deal exit from the EU – and euro rose 0.7% and 1.2% respectively against the greenback. The Japanese yen also go in on the action, climbing 0.8%.

This in turn left the FTSE and CAC unchanged on the day, though the DAX added 0.3%.

As for Europe’s travel sector, it was in dire shape on Monday, severely shaken by the UK government’s decision to quarantine those returning to Spain, with the warning that other countries could join that list with little-to-no warning. The sector’s losses did ease somewhat as the session went on, though that still meant IAG, easyJet and TUI fell 6%, 8% and 11% respectively.

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