The US Treasury’s sharp decision regarding bond buybacks, the dollar’s plunge to multi-month lows, an explosive Bitcoin rally, a vertical liftoff in precious metals, and escalating tensions surrounding Iran defined the past trading week. Markets faced elevated volatility as investors reallocated capital across safe-haven and risk assets.
Below is a summary of the key economic developments, major asset moves, and key trading benchmarks from recent sessions.
Dollar selloff: The US Dollar Index (DXY) lost roughly 1% over the week, dropping toward the 98.8 area. The retreat was triggered by the US Treasury’s decision to boost long-term bond buybacks from $2 billion to $4 billion, which dragged down Treasury yields and sharply weakened the greenback.
Yield swings: The 10-year yield is hovering around 4.7%, while the 30-year yield trades near 5.25%. Investors worry that the authorities' actions will ensure only temporary relief amid a widening fiscal deficit and heavy corporate debt issuance (including AI tech giants).
Hawkish FOMC: The release of the July FOMC meeting minutes revealed policymakers' readiness for further policy tightening, creating a stark divergence between the Fed’s stance and the Treasury’s measures.
JPY volatility: The USD/JPY pair is trading around 159.0. With inflation accelerating in Japan, markets are pricing in a potential Bank of Japan rate hike in September. That being said, the wide interest rate differential and sustained carry trade demand continue to weigh on the yen.
AUD rally: The Australian dollar climbed above $0.71, locking in its 8th consecutive week of gains, which is its longest winning streak since 2020. Broad-based US dollar weakness completely overshadowed domestic headwinds from Australian unemployment rising to 4.5%.
Strong upside impulse: Gold and silver are targeting a 3rd straight week of gains. Gold firmly consolidated above $4,500 per ounce (+4% on the week), while silver surged above $68 (+5%).
Safe-haven demand: The primary catalysts included a flight from FX volatility, a weakening U.S. dollar, and steady buying of precious metals by global central banks, including the PBOC.
Second straight winning week: Brent crude price rose above $93 per barrel, gaining more than 5% on the week.
The Iran factor: The conflict between the US and Iran around the Strait of Hormuz continues to escalate. Washington is preparing a comprehensive package of stringent economic sanctions (‘economic D-Day’), aiming to sever Tehran’s financial and commercial channels completely.
Infrastructure strikes: Continued strikes against Russian energy infrastructure have created localized fuel shortages, applying additional pressure to global supply chains.
Massive rally: Bitcoin demonstrated an impressive $12 000 surge, pressing toward the $75 000 mark (+19% over the course of a week, which is its strongest weekly performance since February 2024).
Inflows and liquidations: The upside was driven by Donald Trump’s call to pass the Clarity Act for the crypto sector, record inflows into spot Bitcoin ETFs ($517 million), and a massive $2.7 billion wave of short liquidations.
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