As we explained on Friday, the foreign exchange market saw some extreme volatility. The British pound surged again on the US dollar, while the euro advanced as investors looked ahead to a week packed with key economic releases. GBP/USD soared through 1.3450 for a dramatic recovery as traders demonstrated solid bullish sentiment. At the same time, the EUR/USD advanced over 1.1300, bouncing back from Tuesday’s sell-off.
In fact, during the Asian trading hours on Friday, GBP/USD was up close to a quarter of a percent. This remarkable increase moved the value of the currency pair to approximately 1.3450. This upward movement is especially notable today as market watchers await the release of the key UK Retail Sales figures, due at 4:30am ET. This data is likely to help shed further light on consumer spending patterns and the prevailing economic conditions in the UK as a whole.
“GBP/USD rebounds above 1.3450 toward 39-month highs, UK Retail Sales eyed” – www.fxstreet.com/currencies/gbpusd
As the Forex market digested these changes, the euro proved to be quite strong as well. The EUR/USD pair traded around 1.1310 during the same hours, recovering its recent losses and positioning itself favorably ahead of the anticipated German Q1 GDP data. Analysts are saying that the euro’s rise might reinforce confidence that the Eurozone economy is recovering as investors await what are likely to be key economic releases.
“EUR/USD climbs above 1.1300 ahead of German Q1 GDP data” – www.fxstreet.com/currencies/eurusd
Apart from exchange rates, gold prices were another indicator of supply and demand factors coursing through the market. The outlook for the shining metal is bright and appears to be on an irrevocable rise. Safe-haven buying continues to increase, fueled by a weaker dollar. This trend indicates that investors are moving towards gold more than ever, treating it as a safe haven asset during these challenging economic circumstances.
“Gold bulls have the upper hand amid safe-haven buying, weaker USD” – www.fxstreet.com/markets/commodities/metals/gold
Here are five big things market participants are watching that may determine where the currencies go over the next few days. The UK Retail Sales data and German GDP figures are expected to play pivotal roles in shaping market sentiment and trading strategies.
The currency markets are on edge ahead of more action as traders try to price in the ramifications of these economic reports. Needless to say, analysts and investors alike are closely watching this continuing volatility and changing narrative. For this reason, GBP/USD and EUR/USD will probably be the most in the spotlight.