The GBP/USD pair continued its upward trajectory, reaching a two-week high above 1.2400 on Friday, as better-than-expected UK preliminary January PMI data bolstered the Pound Sterling. Meanwhile, investors are keenly eyeing macroeconomic data from the United States, which may influence future market movements. At the same time, easing fears over aggressive U.S. tariffs on China have contributed to a rise in the XAU/USD, with gold clinging to daily gains above $2,770, nearing its record high.
The Federal Reserve has indicated that further policy loosening will depend on evidence of economic weakness and more subdued inflation figures. This cautious stance has shifted market focus towards upcoming U.S. economic indicators, particularly the PMI reports expected to provide insights into the health of the economy. In Europe, Germany and the Eurozone's upbeat PMI data have shown an expansion in private sector business activity, giving the Euro a boost and driving the EUR/USD to trade near 1.0500 on Friday.
President Trump's policies of low taxes and light-touch regulation continue to be viewed positively for economic growth. This perspective is further supported by improved market sentiment as concerns over potential U.S.-China tariff escalations subside, contributing to favorable conditions for gold prices. Gold remains within touching distance of its record high of $2,790 set in late October, driven by these geopolitical developments.
Moreover, the cryptocurrency market is witnessing notable activity as Dogelon Mars (ELON) continues its rally, posting gains of over 18% this week. This surge highlights the growing interest and volatility in the digital currency landscape.