GBP/USD extended its weekly uptrend, reaching a two-week high above 1.2400 on Friday. This upward movement comes as the UK's preliminary January PMI data surpassed expectations, bolstering Pound Sterling. Meanwhile, the Federal Reserve has signalled that it requires clear evidence of economic weakness and subdued inflation to consider further policy loosening. In the broader European context, the euro saw significant gains, briefly rallying above the 1.05 level amid positive economic indicators and potential shifts in trade policy.
The upbeat PMI data from Germany and the Eurozone contributed to the euro's robust performance. Notably, the flash composite index from S&P rose above 50 for the first time since August, reaching 50.2—a sign of expansion in private sector business activity. Additionally, the manufacturing sector PMI in the Eurozone exceeded expectations with a reading of 46.1 against a forecast of 45.3. However, the services index slightly missed expectations, registering at 51.4 compared to the anticipated 51.6.
President Trump's approach to low tax and light-touch regulation is expected to stimulate growth, providing further momentum for currency markets. The prospect of a softer stance on trade protectionism from Trump is seen as a bullish signal for the euro, given its reliance on external demand from major economies like the US and China. The easing of US tariffs on China has also contributed to this positive sentiment, aiding in the rise of XAU/USD.
Gold maintained its position above $2,770 on Friday, staying close to its record high of $2,790 set in late October. The metal's resilience is attributed to ongoing shifts in trade policies and global economic signals. In the cryptocurrency market, Dogelon Mars (ELON) continued its impressive rally, gaining over 18% this week and maintaining upward momentum on Friday.