The greenback is still finding support from the US durable goods data of April after the oil prices have eased lower this week lightening the pressure on the greenback and the stagflation threats. The gold has dragged down below 900 versus the greenback. April durable goods excluding transports have risen by 2.5% and the broad figure has declined by just .5% and the market was expecting a decline by 1% and we wait today for the release of US GDP Q1 which is expected to be 1% with core PCE at 2.2%.
The British pound is under pressure today as the slump of the UK housing prices by 2.5% m/m in May and 4.4% yearly. The data added concern about growth and low demand in UK and highlighted the need for cutting interest rate again soon to stem of this decline. The British pound came lower than 1.97 before getting some of its lost ground back again and it is trading currently at 1.972.
The single currency is still struggling amid weak germane employment data. The unemployment rate increased in May to 7.9% from 7.8% in April with positive unemployment changes by 4k and the market was expecting -20k.
The stagflation threats have increased in all of US, UK and EU too. As the high energy and commodities prices amid growth slow down facing all of these economies. The interest rate in not expected to be changed soon. The market is waiting for getting out of this spiral which cause a slow down in consuming spending and business spending and increased demand for gold as the pessimism and slow growth which lower the appetite for taking risk.
Best wishes
FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
