Weekly Update 9 Aug 2019 CNY Plunges
National currencies and bonds fell, while all other asset classes were mixed, but mostly lower. The largest gains and losses were both in the cryptocurrency group, as Bitcoin rose 8.6% and Ethereum fell 7.0%. The second-largest losses were in the Chinese Yuan, which plunged 6.4% — a huge one-week drop for a national currency. The next largest gains were in gold stocks, which added 1.3%. The only other rising asset was silver, up 1.0%.
National currencies were all lower, led by the Chinese Yuan, which fell 6.4%, setting off a cascade of effects as Chinese investors moved to safe havens like Bitcoin, silver and gold. Many currencies, including the British Pound Sterling, the Canadian and Australian Dollars, as well as the Argentinian and Chilean Pesos, hit new all-time lows this week. Even the Euro, down 2.9%, sits only 3% above its all-time low. The US Dollar, off 3.7%, is still relatively strong, about 25% above its all-time low. Bonds fared better than cash, as the short term SHY fell 3.6%, and the long term TLT (considered by many a "safe haven" asset) dropped 1.2%.
Bitcoin hit a high of 250.6 grams on Tuesday, then pulled back to close at 246.4 grams, up 8.6%. Ethereum followed a similar pattern, but rose less and fell back more than Bitcoin, resulting in a 7.0% loss for the week. This was also the pattern for many of the "alt-coins", as crypto investors switched to the oldest, largest, most stable and most liquid of the cryptocurrencies, Bitcoin.
Gold stocks shone this week, adding 1.3%, the only equity class to make gains. They are also the only equities to be up year over year. The Japanese Nikkei took the biggest hit, falling 4.8%, followed closely by the Dow Jones Industrials, which declined 4.5%.
Silver was the lone gainer among the commodities, rising 1.0%. The largest losses were in crude oil, which dropped 5.7%. Precious metals showed relative strength; in addition to silver's gain, palladium and platinum had the smallest losses in the commodity group, giving up 0.8% and 1.2% respectively. However, platinum did hit a new all-time low of 17.6 grams this week before recovering to close at 17.9 grams.
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