FED, ECB, drones and missiles shook the asset market in April 2024

Interesting times

For investors last month was very interesting. Generally, investors have experienced a lot of interesting moments this year, but April 2024 was, arguably, so far the most interesting month of year 2024. Before we focus on this month’s events, just a short reminder: it was 26 months ago when Russia escalated its invasion to Ukraine on February 24th 2022. Since that time I have published 25 (including this one) posts on monthly basis and analyzed the performance of five chosen assets. In the pot there are fiat currencies (Euro, Z?oty, and Isreali Shekel), Bitcoin, and gold. Welcome to another episode of the series.

April 10th , Euro down

Euro is currently well under its pre-war level, with the total loss around 5.3%, which is the worst quotation since last October. The major fall happened on April 10th. It was the direct consequence of the European Central Bank hinting a strong intention of rate cuts this year. At the same time, the Federal Reserve showed the opposite appetite, denying any further rate cuts, amidst persisting inflation in the country. Euro-Dollar couple proved its ultimate dependence on relevant central banks and European currency spectacularly lost almost 2% in few weeks against the greenback. The clear and interesting commentary was delivered by Euronews.com and I recommend the source for more details. The drop of April 10th was continued for two days and would likely last longer, but the events of April 13th on Middle East turn global attention to the region, again.

?Euro vs. US Dollar in April 2024, the major drop occurred between April 10th and 12th; source of chart: xe.com

April 12th , gold all-time high

On Friday April 12th gold was record high, well over $2,400 per ounce. Still, on April 24th (i.e. 26 months after the outbreak of the war in Ukraine) price of gold ounce sits over $2,300. It means that gold has grown ca. 22% since February 2022. Last March the asset also set the record, signaling strong global demand for traditional investment protecting vehicles among invetors. The analysis by reuters.com contributed that growth to high demand for safe-haven among investors. Indeed, simultaneously US Dollar grew against major currencies. Clearly, the demand for both gold and American currency was incredibly high as markets expected another political and military shocks; and they were right.??

gold vs. US Dollar (upper chart) and Euro (lower chart) in April 2024, the all-time high price was recorded on April 12th; source of chart: xe.com

April 13th , Iran attacks Israel

On April 13th 2024? Iran and its allies attacked Israeli territory with drones, cruise and ballistic missiles. It was a retaliation strike for Israel had attacked Iranian consulate in Syria. The Iranian was another step in the recent conflict against Israel and Hamas, the Palestinian organization operating from Gaza Strip. The escalation of the conflict few months ago made Shekel a currency of war-zone country and that way it was included in the asset pot. It also drew Isreali currency down. The latest Iranian attack increased uncertainty in the region. Shekel, which had been recovering for several months from the shock created by the conflict with Hamas, began to fall again. Media fiercely speculated about possible Israeli retaliation, which would be another factor destabilizing the situation in the Middle East. Clearly, the event marked another phase of the tensions between both countries, as The Guardian noted in their commentary.

April 19th , Israel strikes back, Shekel dives

Actually, Israel stroke back with no delay, on April 19th. The hit was not a full-scale blow, however, and gave some reason to hope for ceasing escalation. Before more optimistic views prevailed, Shekel hit the hard bottom of 26.3 cents. Then it recovered for some time just to come back to its downward trend. Currently, Shekel is even lower than it was directly after both recent military strikes. However, it is still higher than directly after Hamas attack, which shows relatively limited impact of the latest escalation to the actual international perception of the conflict. Even so, the unstoppable, continuous Shekel deterioration indicates that the conflict will be very likely a long and devastating one. From this perspective short term periods of intensified mutual aggression are not a real game changers.

Isreali Shekel vs. US Dollar in April 2024, the continuous fall with the local minimum on April 19th; source of chart: xe.com

Guns and banks

This April the mixture of financial and military events shaped currencies. Dollar went strong and Euro weak due to central banks actions or statements. Shekel remained under the pressure of the local military conflict. In long term assets seem to depend on very diverse factors as they perform differently. Since the outbreak of the war in Ukraine two out of five assets in the pot lost their value. Specifically, they are Euro (-5.3% in total) and Shekel (-19.7%). Shekel is indeed the worst performing asset. This April, specifically, it was a military conflict which impacted Shekel. Euro was a victim of central banks. On the other hand Bitcoin (+78%) is the ultimate leader of growth. Gold enjoys impressive rise of 21.6%. Polish Z?oty is virtually on the same level as it was 26 months ago. All percentages are calculated for the period from February 24th, 2022 to April 24th, 2024.

?Gold, Euro, Bitcoin, Shekel and Z?oty price in USD for last 25 months. Bitcoin and gold just reached their historically highest levels. The chart showing relative change of the average market price of EUR and PLN (in USD); data source: xe.com

Summary of March 24th; 2024:

·?????? on?digitalbankology?blog

·?????? on Linkedin

Summary of February 24th; 2024:

·?????? on?digitalbankology?blog

·?????? on Linkedin

Summary of January 24th; 2024:

·?????? on?digitalbankology?blog

·?????? on Linkedin

Summary of December 24th; 2023:

·?????? on?digitalbankology?blog

·?????? on Linkedin

Summary of November 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of October 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of September 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of August 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of July 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of June 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of May 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of April 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of March 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of Fabruary 24th; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of January 24th?; 2023:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of December 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of November 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of October 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of September 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of August 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of July 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of June 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of May 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of April 24th:

·?????? on digitalbankology blog

·?????? on Linkedin

Summary of March 24th:

·?????? on digitalbankology blog

·?????? on Linkedin