Forex Market Still Subdued as China Posts Huge GDP Fall
- EUR/USD and Others Show no Significant Movement
- China Announces Record GDP Decline
- Trump Outlines Re-Opening Plans amid Drug Results Boost
Another difficult week for the forex market is coming to a close with little in the way of positive movement. The EUR/USD market still languished below the 1.09 mark early on Friday. This comes even as European stocks reacted positively on encouraging results from drug trials carried out by US firm Gilead Sciences. Traders may be reacting tentatively on the back of Chinas record GDP fall earlier on Friday.
Major Forex Markets Holding Back on Mixed News
Despite early gains across the board in European markets, the Euro and GBP have both struggled to make any significant moves early in the day. Forex trading markets have been slow to make any movements likely due to a lack of certainty on a day that has brought mixed news. The suffering of Asian markets earlier in the day is now being counteracted by a boost in European stocks.
This mixed news has likely left forex traders in two minds as to their next move, and deciding to adopt a more risk-off strategy moving into the weekend. Forex brokers may see more action throughout the day or into Monday as the news on potentially positive drug trials brings traders back to the market. For the moment though, it seems everyone is taking a moment to digest the main news stories of the day.
Biggest Fall in Chinese GDP Since 1992
China posted the biggest drop in its GDP since official records of the number began in 1992. The Q1 drop of 6.8% came in slightly above what analysts had predicted. This comes in much expected fashion since the country has suffered from major shutdowns since the Lunar New Year in January. Retail sales also fell 19% as shoppers stayed home together with the rest of the nation.
As the country still struggles to return to work following the coronavirus outbreak, experts are predicting that growth for 2020 overall will slow considerably. This number is expected to come in at around 2.5% for 2020. This would be a big drop from the 6.1% gains posted in 2019. With the outbreak far from over, there is still much concern globally that these numbers could fall even more in the coming months.
Drug Trials Provide a Hint of Optimism
Both European and American markets jumped in early trading on news that trials from American drug makers Gilead Sciences have shown positive results in rapidly reducing fever and respiratory symptoms in COVID19 patients. The company posted a share price increase of more than 16% on the news.
At the same time, President Trump has released a three-stage plan for the country to get back to work. The plan may pave the way for some states to reopen if they show a downward trajectory in cases and positive tests in the previous 14-days before enacting the plan.[table “14” not found /]