Thursday was a day of significant developments across global markets. It began with positive economic data from Australia and New Zealand, where both GDP (NZ) and employment figures (AUD) exceeded expectations. This bolstered both the Australian and New Zealand Dollars, which performed strongly throughout the session. Later in the day, the Bank of England held its interest rate steady at 5%, a move widely anticipated by the market. In the US, lower-than-expected unemployment claims added to the positive sentiment, providing a boost to the US dollar and equity markets.
Now, moving into Friday, the focus has shifted to Asia, starting with the Bank of Japan’s interest rate decision. As expected, the BOJ kept rates unchanged, but it was Governor Ueda’s remarks that grabbed attention. He pointed to moderate economic recovery and lingering uncertainties, suggesting that there may be room to raise inflation outlooks in the future. This led to a significant decline in the Japanese Yen, which has been the weakest currency over the past week. The Yen, which had been strong in recent months, is now back on a downtrend, confirming a return to its long-term pattern of weakness.
In contrast, the British Pound continues to lead the currency market, supported by much stronger-than-expected UK retail sales figures released earlier today. This data underscores a resilient consumer sector in the UK, boosting confidence in the British economy and keeping the Pound as the top performer for the week.
Equity markets in Europe are undergoing a correction on Friday after a week of gains. The pullback is not surprising, given the strong performance earlier in the week fueled by the US Fed’s rate cut.
On the commodities front, gold is holding at long-term highs, reflecting ongoing market uncertainties and demand for safe-haven assets. Oil, however, is facing resistance near $72.5 per barrel for WTI crude, a critical level that could invite sellers to push prices lower if it holds.
As Friday progresses, traders are keeping an eye on upcoming retail sales data from Canada and additional speeches from central bankers, which could set the tone for the end of the week and beyond.