The buoyancy in the currency markets is remarkable. The GBP/USD currency pair continue their bullishness above 1.3550, scoring a gain for the second consecutive week. The EUR/USD has rallied to 1.1700. It has since continued to hold on to its bullish momentum in the face of conflicting economic signals out of the U.S. These continuing trade skirmishes and geopolitical events are definitely affecting investor sentiment and the market.
Meanwhile, the GBP/USD currency pair continues to hold above the important support at 1.3550, reflecting a gradual recovery despite some significant uncertainties in the market. Analysts note that this newfound stability is playing a major role in boosting the currency’s prospects of ending the week firmly in positive territory. The pair’s strength is a testament to the current era of currency volatility, as currencies around the world find themselves weathering unknowns in the global economic storm.
At the same time, the EUR/USD has climbed to around 1.1700, keeping up its bullish dynamism. On one hand, the US economy is turning in pretty rosy data. As a result, it has become difficult for the US Dollar to garner any meaningful demand despite an overall bullish move. In doing so, the euro has been the clear winner, maintaining its strength and firm trajectory into positive territory.
All of these mixed economic indicators from the United States are certainly generating a lot of uncertainty. Consequently the US Dollar finds it difficult to maintain much support. News reports indicate that different economic indicators have failed to paint a consistent picture of recovery, leaving would-be investors confused and giving them pause. This period of ambiguity created an environment for currency pairs like EUR/USD to flourish, as investors look for more safe-haven, stable currencies.
To complicate things further, gold has been weathering a pretty tight trading band beneath $3,350 per troy ounce since mid-May. The precious metal is falling by the wayside in the markets. Traders are treading with care as everyone waits for significant geopolitical storylines to play out. Notably, gold’s price is most positively influenced by a rise in the selling pressure on the US Dollar. They note marginal gains in US yields across the curve weighing on the market.
The upcoming Trump-Putin meeting is casting a prudent tone over gold trading, as investors remain wary of potential outcomes that could impact global markets. Asian economic integration and US trade tensions produce a toxic mix of hopes and expectations. Signs point to an increasing severity of these tensions in coming months.
Buoyant markets signal that investors are increasingly concerned about the implications of US trade policy and its potential effects on international relations. This legitimate concern only adds to the volatility in currency and commodity markets. Brokers and public traders will react to the market as the news continues to break and develop.