GBPUSD cheers strong UK growth numbers, US Dollar pullback

Market sentiment improves on early Friday, after a volatile Thursday, as traders anticipate a sooner end to the rate hike trajectory at the major central banks. Adding strength to the optimism could be China’s opening of credit lines for local government bodies, as well as the upbeat UK statistics.

Thursday’s unimpressive US inflation initially drowned the US Dollar before recalling the Greenback buyers. The recovery moves, however, reverses so far during the day as multiple Fed officials flag nearness to the end of inflation woes. Also, a slew of market surveys and central bankers defended their latest efforts to pause the rate increases, or a slower rate lift, to add strength to the risk-on mood. Among them, RBA Governor Lowe gained major attention.

It’s worth noting that the US Dollar’s retreat and China-linked optimism allowed stocks in the Asia-Pacific zone to edge higher while also tracing the recovery of the S&P500 Futures. With this, prices of gold and crude oil print mild gains whereas the AUDUSD remains firmer but not the NZDUSD.

Elsewhere, BTCUSD and ETHUSD fail to cheer softer US Dollar, as well as upbeat industry news, amid looming uncertainty about US regulations.

Following are the latest moves of the key assets:

• Brent oil prints mild gains around $86.70 to reverse the previous day’s pullback from yearly high.
• Gold price recovers from the lowest level in a month to around $1,918, up 0.28% intraday at the latest.
• USD Index fades the previous day’s rebound from weekly low, down 0.10% intraday near 102.55 as we write.
• Wall Street benchmarks closed with minor gains and so did the stocks in the Asia-Pacific zone. That said, equities in Europe and UK trade with small losses by the press time.
• BTCUSD and ETHUSD print near 0.20% intraday loss each to around $29,400 and $1,850 of late.

Markets consolidate the heavy moves

Although the traders are cheering the cool down in the US inflation data, as well as hopes of softer rates at the key central banks, a few US inflation numbers are still in the pipeline and can reverse the moves in case of posting strong price pressure signals. Additionally, China’s efforts to defend the world’s second-largest economy appear ephemeral amid unimpressive data and likely political tension with the West. Additionally, the UK’s economic numbers need to establish a pattern to push back the concerns of the British recession.

Even so, the softer rates and likely easing in inflation may ultimately push back the US Dollar bulls unless today’s US PPI and other inflation clues print strong numbers.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Some more data to watch

Thursday’s joyride for momentum traders isn’t dead as the market players lick their wounds ahead of the US PPI and sentiment data, as well as additional proof of easing US inflation. Additionally, China’s efforts to improve economic growth and the UK’s strong Q2 GDP need validation from the optimists in the Western markets to defend the latest move.

May the trading luck be with you!