The foreign exchange and commodities markets are seeing a similar twin-track approach as conflicting forces drive different impulse on market sentiment. The GBP/USD currency pair is under some modest selling pressure, heading back down towards the 1.3230-1.3220 area. At the same time, the US dollar or the Greenback is having an admissible recovery against the hard currencies. These movements happen amid a backdrop of mixed economic signals. They are symptomatic too of the heightened geopolitical culture of the times, particularly regarding the current trade war with China.
Surprising UK jobs report paints a mixed picture
Speculation on searches, or search speculation? These ups and downs have taken a toll on the GBP/USD exchange rate. Uncertainties loom. Even with these uncertainties, the British pound, or commonly called “Cable,” has been remarkably resilient. This resilience could in part be due to market optimism regarding the UK economy’s recovery path, at a time when investors are still digesting mixed messages from the economy.
Across the aisle in the commodities market, gold prices are hovering above $3,200 per troy ounce. XAU/USD upside potential is capped. A calmer risk environment and subsiding fears of a global trade war are impeding the momentum. World-wide economic recovery optimism is causing investors to pull back and take stock of their investing strategies, which is putting a ceiling on gold’s upward trajectory.
In the meantime, BTC has been climbing quietly to the upside and now trades a tick over $85,500. The digital asset has shot up almost 7% in value in the last week. This surge is symptomatic of a growing investor appetite for all things crypto. This upward movement is certainly welcome, particularly in the midst of the increased volatility that has been a heavy influencer on the crypto markets in recent months.
The conflicting direction of these two key financial instruments illustrates just how complicated today’s economic picture is. UK jobs report gives mixed results and what it means for the direction of the UK labor market remains unclear. At the same time, lingering trade war tensions with China are weighing heavily on investor sentiment.
It is critical for investors to stay sober in this frothy environment. According to majority of retail investor accounts lose money when trading CFDs with this provider. This chilling statistic highlights the danger of trading in volatile markets, now more than ever stressing the importance of making well informed decisions.
The author and FXStreet are not registered investment advisors and this article is not intended to be investment advice. Asset Nexus urges all investors to do their own research and never invest money that they cannot afford to lose.