UK GDP Surprise Lifts Pound, All Eyes on US PPI
Markets are reacting to stronger than expected UK GDP report this morning, with February growth at 0.5%, well above forecasts. The data has supported confidence in the pound and raised expectations for a stronger Q1 rebound. Meanwhile, traders are watching for key U.S. inflation figures this afternoon, as the Producer Price Index (PPI) will give the latest insight into price trends. With gold reaching new highs and the dollar generally weaker, focus is shifting to how the Federal Reserve might respond to persistent inflation.
Key Events – Friday, April 11
- UK Data Surprise:
- GDP MoM (Feb): +0.5% vs 0.1% expected
- Industrial Production: +1.5%
- Manufacturing Production: +2.2%
February’s growth was led by services and manufacturing, suggesting a rebound in activity. The strong data lifted sterling and helped offset concerns around weak wage growth reported earlier in the week.
- US Inflation in Focus (12:30 GMT):
- PPI MoM (Mar): Expected +0.2%
- PPI YoY (Mar): Expected +3.3%
- Core PPI YoY: Forecast at +3.6%
These figures come on the heels of Wednesday’s CPI report and will help shape the Fed’s tone in upcoming meetings.
- Lagarde Speech (09:45 GMT):
The ECB President is due to speak ahead of the Eurogroup meeting, with markets looking for any shift in tone on inflation or interest rate outlooks. - University of Michigan Survey (14:00 GMT):
Includes preliminary readings on U.S. consumer sentiment and inflation expectations — both closely watched for market signals.
Commodities
Crude Oil:
WTI: $60.64 (+0.95%)
Brent: $63.90 (+0.90%)
Oil is staging a mild recovery after heavy recent losses, but sentiment remains fragile amid concerns over demand and the impact of trade tensions.
Gold:
$3,195.90 (+0.22%)
Gold continues to grind higher as investors hedge against inflation and market volatility.
Silver:
$31.23 (+0.15%)
Silver is tracking gold, up over 5% on the week, supported by demand for safe-haven assets.
Currency Movements
- EUR/USD – The euro is trading sharply higher at 1.1266, up 0.60% on the day. The EUR/USD pair has climbed more than 2.8% this week, supported by firm Eurozone inflation data and signs of stability in core economies.
- GBP/USD – The pound is up to 1.2991, a 0.17% gain, with the GBP/USD exchange rate buoyed by today’s strong UK GDP and manufacturing data. Traders are now watching for any shift in the Bank of England’s stance.
- AUD/USD – The Aussie is under pressure, trading at 0.6195, down 0.44%. The AUD/USD pair is struggling amid weak domestic data and ongoing risk aversion linked to China trade flows.
- NZD/USD – The kiwi dollar is trading firmer at 0.5765, up 0.22%. The NZD/USD exchange rate has gained 3% this week, rebounding from oversold levels as global sentiment improves slightly.
- USD/JPY – The yen is strengthening, with USD/JPY down 0.34% to 143.95. The pair has dropped more than 2% this week as falling Treasury yields and risk-off sentiment favour the Japanese currency.
- USD/CHF – The Swiss franc continues to rise, with USD/CHF down 0.03% to 0.8242. The pair is at its lowest level in over a year, driven by safe-haven flows and euro strength.
- USD/CAD – The loonie is holding steady, with USD/CAD at 1.3970, slightly lower on the day. Despite weaker oil, the Canadian dollar is supported by easing U.S. rate expectations.
- USD/MXN – The Mexican peso is gaining, with USD/MXN down 0.15% to 20.46. The peso remains one of the best-performing EM currencies this year, despite occasional volatility.
- USD/INR – The Indian rupee is slightly firmer, with USD/INR down 0.12% to 86.16, as the dollar weakens and energy prices stabilise.
- USD/CNY – The Chinese yuan is under modest pressure, with USD/CNY up 0.27% to 7.3287. Markets are watching for any policy response from Beijing amid softening macro data.
Market Outlook
The tone heading into the weekend will be shaped by how the U.S. inflation data lands. A hot PPI print could renew pressure on the Fed to keep rates higher for longer, while a cooler reading may support the recent dollar pullback. In the UK, today’s surprise GDP data gives the pound a lift, but questions remain around the broader outlook. As gold breaks new ground and the euro continues to climb, traders are bracing for more volatility ahead.