The UK economy exhibit a tale of two cities in May. The S&P Global Composite Purchasing Managers’ Index (PMI) turned a bit more positive, increasing to 49.4 in its preliminary estimate from 48.5 in April. At 45.2 this includes a modest loosening in the pace of contraction in the overall private sector. It does remain below the neutral level of 50, indicating that economic activity overall is still struggling.
In the eventful currency markets, the EUR/USD pair has found some new equilibrium around the 1.1300 level. So traders are looking ahead to the release of briefing.com’s widely-followed U.S. Throughout the European session on Thursday, the pair traded within a tight range around this threshold, reflecting cautious sentiment among investors. And yet, the euro-dollar exchange rate continues to be very stable, with a clear equilibrium between buying and selling demand. Market participants are eagerly awaiting additional guidance.
At the same time, the gold market was undergoing an impressive short-term retracement. After hitting a last seen nearly two-week high earlier on Thursday, gold prices started retreating, hovering around $3,300. This movement indicates some profit-taking among investors after a recent bullish run and is a good reminder of the volatility that can be characteristic of precious metals.
Moreover, the GBP/USD exchange rate managed to remain on a bid tone above the key level of 1.3400 before the expected U.S. PMI data release. The British pound struggled to hold onto its weekly advance. Neither do their responses to the recession, which are shaped by the assumed future state of the UK economy. The recent movements in GBP/USD show that speculators are watching short-term local indicators, as well as global economic and political risks.
As the markets await crucial data releases from the U.S., including PMI figures that could impact trading strategies, investors remain vigilant. UK economic indicators will play into whatever is happening in the U.S. This dynamic will no doubt continue to drive market trends in the coming days.