UK GDP Miss Sends British Pound Lower in Early Trading

Good morning, traders. As we approach the final trading stretch of the week, the market is buzzing with activity after Thursday’s volatile session, which brought several key economic developments and impactful moves across the charts.

On Thursday, the Swiss National Bank surprised the markets with a 50 basis point rate cut, double the expected 25 basis points. This decision sent the Swiss franc sharply lower, making it the weakest currency in the pack. In contrast, the Australian dollar strengthened following better-than-expected employment data, continuing its rollercoaster ride this week. The European Central Bank also delivered a 25 basis point cut, but as expected, it caused minimal volatility on the euro. Meanwhile, U.S. producer price index (PPI) data came in slightly higher than expected at 0.4%, but it failed to significantly shift the dollar’s trajectory.

This morning, the UK GDP data painted a negative picture, coming in at -0.1% instead of the expected 0.1%. As a result, the British pound is under selling pressure, making it the weakest currency in early trading. The American dollar remains dominant, continuing its strong performance throughout the week, while the Australian dollar is holding firm alongside its New Zealand counterpart.

In the indices, sideways movements dominated the week. U.S. indices like the Dow Jones and S&P 500 struggled to gain momentum, while the DAX held a slightly more positive tone. Friday morning brings a mild attempt to climb higher, but overall, indices remain cautious as traders eye the year-end.

On the commodities front, oil showed impressive resilience this week, climbing from midterm lows to midterm highs in just a few sessions. However, Thursday’s gains are giving way to a mild correction this morning. Metals like gold, palladium, and copper posted strong performances earlier this week, but silver lags behind. Today, we see metals taking a breather, with minor pullbacks observed across the board.

The charts reflect a mixed sentiment. The USDCHF continues to rise, buoyed by the diverging monetary policies of the Fed and SNB. At the same time, pairs with the yen are showing signs of recovery as Japanese yen weakness remains in play after a tough week. Oil, after touching key resistance levels, appears poised for a short-term pullback, while indices like the Nasdaq are trying to hold their ground after a choppy week.

As we look to close out the week, all eyes will be on whether the current trends—dollar strength, pound weakness, and oil resilience—will carry into the final hours of trading or if we’ll see last-minute reversals heading into the weekend. Happy trading!

Source: https://www.axiory.com/analytics/market-news/uk-gdp-miss-sends-british-pound-lower-in-early-tra