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Forex Today: UK in recession

Forex Today: UK in recession

Key US GDP data released today confirmed that the UK economy has entered a technical recession after two consecutive quarters of GDP contraction.

➡️ UK GDP data released today showed a 0.3% decline in gross domestic product last quarter, with the monthly figure slightly better than the widely expected 0.2% decline. The data also confirmed the contraction in GDP compared to the previous quarter, confirming that the UK has now technically entered recession after showing two consecutive quarters of economic contraction. The British Pound reacted little to this data release.

➡️ Global stock markets have mostly recovered over the past day following robust earnings data and increased optimism about the tech sector. Trend traders will still look to get involved on the Long side of the major US stock indexes, and day traders may consider trading these indexes Long if they show bullish momentum after the market opens. The S&P 500 Index  has regained the 5000 level.

➡️ In the Forex market, the Japanese yen has been the strongest major currency since Tokyo opened today. The British pound was the weakest. The highest volatility has recently been observed in the currency pair USD/JPY  and in crosses with the Yen, although this is starting to decline. Despite the US dollar's short-term decline, it has seen bullish momentum, with the DXY dollar index hitting a new 3-month high in recent days.

➡️ The Japanese yen remains weak, supported by several factors, such as the Japanese recession, very low domestic demand and an outflow into global equities. Recent data has also confirmed that Japan is no longer the world's third largest economy . These factors will likely make it very difficult for the Bank of Japan to begin abandoning its ultra-loose monetary policy.

➡️ Cocoa futures  are experiencing bullish consolidation just below the recent multi-year high. Trend traders will remain interested in this commodity on the Long side. It has shown a powerful bullish trend for over a year. Cocoa futures have risen more than 25% since the start of 2024.

➡️ Bitcoin  has established itself above the big round number of $ 50,000. In the last few hours it reached a new 20-month high above $52,000. Trend traders and investors will be interested in Bitcoin on the Long side.

➡️ Three high-impact US data will be published today:

  • Retail sales
  • Empire State Manufacturing Index
  • claim unemployment benefits

 

Credit by DailyForex.com

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