The UK government finds itself in a precarious economic position as it urgently seeks higher growth against the backdrop of spending cuts and potential tax hikes anticipated later this year. The fiscal challenges are compounded by a contraction in the UK's Gross Domestic Product, which shrank by 0.1% in January on a monthly basis. Additionally, Manufacturing Production fell by 1.1%, further highlighting the economic hurdles the nation faces.
Adding to the economic complexities is the impact of the ongoing US trade war, which has overshadowed any positive developments in inflation indices. The uncertainty surrounding former President Trump's aggressive trade policies continues to influence global markets, with gold prices remaining well-supported due to these geopolitical tensions. Despite this, the XAU/USD bulls are advised to remain cautious as an improvement in global risk sentiment could affect their positions.
In the currency markets, the GBP/USD experienced a decline on Friday morning in Europe, losing its traction and moving toward the 1.2900 mark. This depreciation reflects the broader economic challenges facing the UK and its currency, exacerbated by the trade tensions.
Meanwhile, in the cryptocurrency sphere, Cardano (ADA) saw its price stabilize above $0.70 following a 5% decline. This stabilization comes after three consecutive losing days for Cardano, as multiple ADA derivatives trading signals exhibit a bullish tendency.
The precious metals market is witnessing intricate dynamics as well. The yellow metal benefits from bets on a possible Fed rate cut, although a modest uptick in the US dollar caps further gains. The ongoing uncertainty surrounding global trade policies continues to lend support to gold prices.