On Thursday, the British Pound was under pressure as the currency fell under 1.3450 against the US Dollar. That drop happened in the middle of the European trading session. This decline is in part a symptom of continued fiscal uncertainty in the U.K., which has prevented the Pound from finding buyers. As market conditions evolve, traders remain vigilant regarding economic indicators that could influence future currency movements.
When the European market opened, the GBP/USD currency cross dropped sharply into negative territory. This fall is symptomatic of growing concerns over the UK’s fiscal prudence. Analysts have commented that fears over public expenditure and the economic recovery are still putting pressure on Pound Sterling. The currency’s travails are only made worse by broader market jitters and the release of potentially opposing data points.
At the same time, the Euro was under pressure as EUR/USD traded with a heavy bias towards 1.1650. This decline came on the heels of disappointing Eurozone Retail Sales data showing a larger than expected drop for July. With retail sales falling, fears grow further over consumer spending and economic momentum in the Eurozone. This increasing drop serves to heighten already prevalent bearish sentiment among the Euro.
As traders continue to scan the currency landscape, they are intently tracking releases from the states as we approach several big releases in the United States. As for key indicators, Initial Jobless Claims on Thursday, ADP Employment Change on Wednesday and ISM Services PMI on Thursday are due. These key reports are the most important indicators of the US economy and can move dollar-based currency pairings in a drastic way.
Gold prices were volatile yesterday, correcting from a new record high around $3,580, before ultimately finding support just above $3,500. This recent volatility in precious metals is due in large part to rising expectations of a dovish pivot from the Federal Reserve. This feat has helped act as a major culprit in capping downside for XAU/USD. Recent trade-related uncertainties have played a big role in the direction of gold prices. With volatility in the global economy, investors are clamoring for true safe-haven assets.
In the fluid financial market situation while market participants expect important employment data US in the core of the global financial crisis. The July payrolls numbers have caused an unprecedented volatility and controversy. Analysts are already predicting what this means for monetary policy and shifts in market sentiment.