Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Draghi dragged euro down
The euro suffered its worst weekly loss of the year so far, as investors fled the single currency after the European Central Bank reduced its monthly purchases of bonds to €30 billion for a period of nine months through September 2018.
The reduction in the amount of monthly bond purchases was widely expected but investors were surprised by somewhat dovish comments from ECB president Mario Draghi.
Draghi insisted that the central bank’s bond buying programme is “open ended”, dashing investor expectations that the onset of quantitative tightening would inch the central bank closer to consider an end date for its massive bond-buying programme.
“The decision today is for an open-ended programme ... it’s not going to stop suddenly. The large majority of the Governing Council expresses a preference for keeping it open-ended,” Draghi said at press conference on Thursday.
EUR/USD fell 0.45% to $1.1599.
Gold prices fell to a second straight weekly loss
Gold prices rose on Friday but struggled to pare losses sustained earlier in the week as a surging dollar offset an uptick in political tensions in Spain which followed Catalonia’s decision to declare independence on Friday.
The declaration of independence from the regional parliament of Catalonia came just hours before the Spanish Senate granted Madrid the power to implement Article 155 of the constitution which paved the way for Madrid to officially impose direct rule on Catalonia.
The news had a little impact on gold prices which fell to a second straight week of losses.
Gold prices traded at $1,274.92, up 0.42% on Friday.
The US economy did something it hadn’t done since 2014
The U.S. economic growth story showed little sign of coming to end after data on Friday showed the economic expanded at a faster rate than economist had expected, despite the disruptions caused by hurricanes Harvey and Irma.
Gross domestic product increased at a 3.0% annual rate in the July-September period, the Commerce Department said in its initial estimate on Friday, adding to the 3.1% of growth achieved in the second quarter.
It was the first time GDP had expanded above 3% in back-to-back quarters since 2014.
The upbeat growth data sparked a surge in the dollar against its rivals to three month highs.
A new coin arrived on bitcoin’s block
Bitcoin gold made its trading debut earlier this week, following a split or fork of the underlying software supporting the bitcoin network, but crashed more than 70% falling to a low of $129.13.
Nevertheless, proponents of bitcoin gold continued to support the newly created cryptocurrency, arguing that it serves an important purpose as it seeks to decentralize the Bitcoin network, which many believe has become inaccessible to the average user, wishing to “mine” bitcoin.
For the uninitiated, Bitcoin miners are users who help maintain the system by validating transactions stored in “blocks” on the network. Using high-powered computer hardware, miners validate blocks by solving a complex “puzzle” – the more powerful the computer the faster its ability to solve the puzzle. Every time a "puzzle" is solved, a reward of roughly 12.5 bitcoins is distributed to the "puzzle solver" or miner.
Application-specific integrated circuits, or ASICs cards - capable of mining bitcoin 50 times faster than traditional video graphics cards – have been rapidly adopted by the lucky few bitcoin miners able afford the super-fast hardware, leading to a concentration of bitcoin miners.
Cryptocurrency experts argue that Bitcoin gold, an ASIC resistant cryptocurrency, was created to solve the problem of mining monopolies that dominate the bitcoin network.
“Bitcoin Gold is the brainchild of Jack Liao and is launching as a hard fork of Bitcoin”, said prominent Bitcoin developer Jimmy Song. “The idea [of Bitcoin gold] is to give mining back to the users who can start using CPUs and GPUs to mine.”
Crude oil prices settled at nearly 8-month highs
Crude oil prices settled close to 8-month highs on Friday buoyed by growing investor expectations that Opec will agree to extend output cuts beyond March 2018 following bullish comments from Saudi Arabia Crown Prince Mohammed bin Salman.
Saudi Arabia Crown Prince Mohammed bin Salman said Thursday the kingdom would support extending output cuts in order to rid the market of excess supplies.
The upbeat comments, weeks after Russia President Vladimir Putin said he supported the idea of extending the output-cut agreement through 2018, come ahead of an Opec meeting in November.
Crude oil prices settled at $53.90 a barrel.