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Daily market commentary: The pound is making gains versus the euro and the dollar



FOREX

The pound is making some modest, but nonetheless remarkable, gains versus both the euro and the dollar during early European trading this Wednesday. Despite this morning’s publication of the first quarter GDP data, which showed the economy contracted by 2% during the first quarter, sterling found support and even gained some ground because the drop in economic output was smaller than expected, with the pre-publication consensus that there would be a fall of 2.5%.

But the respite is unlikely to be long-lived as worryingly the month of March, when the lockdown started, presented the worst GDP decline on record, hinting that this quarter’s figures will be considerably worse.

GBPUSD chart

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market analysis

GOLD

Volatility on gold remains modest with the spot price continuing a slow dance just above the threshold of $1,700 while traders await fresh directional input. Despite European stocks in red this morning, investors are not rushing to buy gold, meaning that they don’t see this correction on stock markets as a reaction to April's rally rather than fundamentally-driven – at least for the time being.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: The pound is making gains versus the euro and the dollar

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