European stocks and EUR/USD trading lower on Wednesday despite the release of the upbeat economic data. Germany Manufacturing PMI climbed higher to 45.2 in June of 2020 from a preliminary of 44.6 and 36.6 in the previous month and the German jobless rate ticked lower to 6.4% in June. While German retail Sales expanded at a monthly 3.8% during May, the biggest increase since February.
Gold price headed for a third straight monthly gain and in this quarter gold is up more than 12% in global markets. During the previous week, the yellow metal gained almost 1.4%, driving investors toward the safe-haven metal. The gold price surged to 8 – year high this month as demand for the safe-haven asset was boosted by worries over a surge in Covid-19 infections and the price also supported by intensified tensions between the US and China, over the China-India border clash.
The British pound trading lower against the Dollar and Euro on Monday as Brexit trade talks resume this week. On Monday, Britain’s chief negotiator Frost will meet in person EU’s deputy chief negotiator Martinez Alberola in Brussels for the first time since March.
The commerce department reported on Thursday, the US gross domestic product (GDP) decreased at an annual rate of 5 per cent in the first quarter of 2020. This is the sharpest quarterly decline since an 8.4 per cent fall in the fourth quarter of 2008 during the depths of the financial crisis.
The IMF said on Wednesday the global economy will shrink 4.9% this year, compared with its April estimate of 3%. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021, global growth is projected at 5.4 per cent, the report said.