This morning, data revealed that during the first three months of 2019, the UK economy grew by 0.5 per cent, as previously forecast. This expansion was an improvement on the 0.2 per cent growth recorded during the final quarter of 2018. Compared to Q1 2018, UK GDP rose by 1.8 per cent, the fastest rate since Q3 2017. However, recent data has indicated that the rate of output has slowed in recent months.
April GDP came in at -0.4 per cent, the weakest monthly figure since March 2016.
Meanwhile on Friday, the US dollar was left flat as investors anxiously awaited Saturday’s meeting between US President Donald Trump and Chinese Leader, Xi Jinping.
Risk appetite increased as reports suggested that the US and China were discussing an agreement that would avert the next round of $300 billion worth of tariffs on Chinese imports.
Commenting on the talks was Masayuki Kichikawa, Chief Macro Strategist at Sumitomo Mitsui Asset Management Co.
He said: “The minimum to keep markets where they’re at now is for the United States and China to agree to keep talking and buy some time.
“Markets are doubtful the leaders of [the United States and China] can reach a full agreement.”
Yesterday US GDP was left unrevised at 3.1 per cent for the first quarter.
The government confirmed that US economic growth accelerated in the first three months of 2019.
Looking ahead to this afternoon, US dollar sentiment could be left dampened following the release of the US Chicago PMI.
The US dollar could dip slightly if it is revealed that the PMI slumped further than forecast in June, but US dollar movement will be limited ahead of tomorrow’s all-important Trump/Xi meeting.
Progress in trade talks would boost higher risk currencies.
It could also reduce the odds of a near-term rate cut from the Federal Reserve and lend the US dollar support.