The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
The GBP awaits the GDP release
Information is not investment advice
The British Q4-2019 preliminary GDP is released at 11:30 MT time on Tuesday.
Instruments to trade: GBP/USD, EUR/GBP, GBP/JPY
In the third quarter of 2019, British GDP rose by 0.4%. That was a bit higher than the expected 0.3% growth and helped the GBP to stay afloat. However, even though this news was positive for the UK, the impact on the GBP was quite limited. That is, if we measure the movement of GBP/USD or EUR/GBP in each of the two days of the indicator release (we remember it always comes in two steps: preliminary figure, bringing a more powerful impact, and final figure, which is normally just an adjustment of the preliminary one).
For this reason, you may expect the GBP to grow stronger against its counterparts on a better-than-thought British GDP growth rate, but the reaction may not be noticeable unless the discrepancy between the forecast and the actual number is really big. If you trade short-term, however, a momentary impact on the pound may be more intense, so you can use it to make a profit.
- If the indicator overshoots the forecast, the GBP rises.
- If the indicator comes lower than expected, the GBP falls.
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
The US NFP will be published on August 7 at 15:30 MT time.
The RBA will make a rate statement on August 4 at 7:30 MT time.