On June 1, the GBP/USD pair blasted over the key 1.3500 level. This pump revealed unstoppable bullish momentum backed by a cocktail of exacerbating factors. On the first trading day of the month, the US Dollar was hit with some of the heaviest selling pressure. As a reaction, the pound sterling appreciated sharply against its US rival. Analysts said ferment over the collapse of trade talks between the United States and China increased volatility in the markets. This boost to volatility helped to spark the rally in GBP/USD.
During the day, GBP/USD rose sharply above 1.3500 resistance level. Traders are pushing up a very bullish British pound. This increase is happening as they respond to the dollar’s increasing overall weakness. The dollar’s value is declining amid rising concerns over US economic conditions. These worries are informed by current geopolitical events and trade scares.
Alongside GBP/USD’s advance, EUR/USD saw significant appreciation, rising above 1.1400 on Tuesday. The euro opened June on a strong footing, aided by similar factors to those boosting the dollar’s value. With the US Dollar weakening, the EUR/USD rose as a result. Market uncertainties surged and traders had to look to other safe-haven assets, including gold.
With so much still in the air and speculation rampant, all eyes were turning towards more key US economic data expected on the horizon. Fingers crossed for May ISM Manufacturing PMI results. In doing so, it should provide powerful new insights into the health of the US manufacturing sector. Analysts are already predicting that this data will be a major driver of currency trends and trader sentiment in the months to come.
Even gold, an asset that historically appreciates in such risk-averse conditions, surged on June 1. The safe haven precious metal surged over $1,350, fueled by the ongoing risk-off sentiment across international markets. The evolving conflict between Russia and Ukraine, along with concerns over US-China trade talks, increased investor risk appetite. Due to the ensuing chaos, gold became a preferred asset for investors looking for security during the unrest.
GBP/USD marching to the strongest levels since 2019 while EUR/USD makes gains as well. Unsurprisingly, traders are reacting to shifting economic indicators and important geopolitical developments, fueling this larger trend. Markets are now heavily focused on the next round of data releases. As this new information comes to light, currency pairs are in for some more volatile trading.