GBP/USD below 1.2200 after Q2 UK GDP contracts – Daily Market Brief, August 12, 2022

In Friday’s early European trading, the pound fell below 1.2200 against the dollar. According to newly released statistics, British economic output shrank by 0.1% quarterly and 0.9% monthly (June). The DXY has been trading over 105.00 for some time now.

In contrast, the US Dollar Index (DXY) has been falling for five days in a row and is having trouble holding onto its gains from the rebound off a six-week low. Recent declines in the value of the greenback may be linked to recent negative US inflation data prints and improved employment figures. 

Key Factors for Today

– Stocks in Asia and the Pacific were choppy, mirroring the indecision on Wall Street
– According to European stock market futures, trading will likely be quiet to start the day
– DXY stays around 105, and the New Zealand dollar is the strongest of the G10 currencies
– Brent and WTI found resistance at $100 and $95 overnight

Coming Up 

– Eurozone Industrial production
– US Import/Export Prices

Yesterday’s US markets closed neutral but off their highs.

Yesterday’s trading on the three major US market indices was choppy. The Dow industrials managed a slight gain, while the S&P 500 and NASDAQ both lost ground and ultimately finished in the red. Over the day, the S&P gained as much as 1.14% and the NASDAQ gained as much as 1.33%. Despite being up as much as 1.03%, the Dow industrials ended the session nearly flat. Small-cap stocks as measured by the Russell 2000 index ended the day modestly higher as well.

Beginning today, China will hold live-fire training drills for a whole week.

According to state-run Chinese media, China will hold live-fire shooting drills in the Bohai Sea beginning on August 12 and continuing until 10 in the morning on August 18. On Thursday, the Tangshan Maritime Safety Administration announced that entry will no longer be permitted.

July saw a 2.1% month-over-month increase in New Zealand’s food price inflation index.

The Food Price Index (FPI) is a month-over-month indicator that tracks the price changes of food and food services bought by individuals and families in New Zealand. Both inflation and interest rates in New Zealand have been climbing for quite some time. A further increase from the RBNZ in interest rates is anticipated for the coming week (the meeting is on August 17)

The IEA expects oil demand to increase in the year 2022.

According to the International Energy Agency, increasing use for power generation and the move from gas are predicted to increase global oil demand growth by 380,000 barrels per day this year. IEA’s June prediction was 1.8 million bpd. The Paris-based agency predicts global oil demand will reach 99.7 million bpd in 2022 and 101.8 million bpd in 2023. World oil supply will climb by 1 million bpd by year’s end.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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