Pound ( GBPUSD=X )
The value of the pound has edged higher after official figures showed Britain’s economy slowed down in the run-up to the budget.
Sterling was up 0.1% against the dollar to $1.2665 but slipped 0.2% against the euro ( GBPEUR=X ) to €1.1991.
In the second quarter, the economy expanded 0.5% amidst expectations that the economic recovery was gaining momentum and a business-friendly Labour government was about to take the reins.
“The pound is higher on Friday; however, this is due to a general move lower in the dollar and does not appear to be linked to the GDP report. If the dollar continues its decline, then we could see a return to the $1.27 handle in GBP/USD. The market is not expecting the BOE to cut rates next [month], with only a 15% chance of a cut,” Kathleen Brooks, research director at XTB UK, wrote.
Read more: UK growth slows between July and September as services sector falters
Growth of 0.1% represents an undershoot of the Bank of England's projection made in the November Monetary Policy Report.
Gold ( GC=F )
Gold prices have slumped to a two-month low as a strong dollar is making the precious metal more expensive for overseas buyers.
Spot gold rose marginally by 0.1% to $2,565.88 per ounce as of Friday, recovering slightly from a two-month low earlier in the session. Meanwhile, US gold futures edged 0.1% lower to $2,569.20.
The dip reflects shifting expectations around US monetary policy, with investors bracing for a tighter US Federal Reserve stance in 2025 under Donald Trump’s administration. Anticipation of higher interest rates diminishes gold’s allure, as the opportunity cost of holding non-yielding assets like gold increases.
Fed chair Jerome Powell reinforced this cautious outlook on Thursday, saying that steady economic growth, a strong labour market, and persistent inflation above the 2% target suggest little urgency for rate cuts. His comments followed fresh data showing US producer prices accelerated in October, signalling that progress on curbing inflation may be stalling.
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Market expectations for a December rate cut have cooled significantly. The CME FedWatch tool now indicates a 58.9% probability of a 25-basis-point rate cut, down from 83% the previous day. Powell's remarks further tempered hopes for immediate monetary easing, adding to the headwinds for gold.
Oil ( BZ=F )
Oil prices fell on Friday as signs of tepid demand from China, the world’s largest crude importer, and a Trump 2.0 administration weighed on markets.
Brent crude futures lost 0.1%, trading at $71.58 per barrel, while US West Texas Intermediate (WTI) ( CL=F ) slipped 1.3% to $67.82 per barrel at the time of writing.
The International Energy Agency (IEA) projects that global oil supply will surpass demand by 2025, even if current OPEC+ production cuts remain in place. This forecast reflects growing output from non-OPEC producers, including the US, outstripping demand growth, particularly as concerns over China’s economic resilience persist.
Adding to market jitters are geopolitical uncertainties linked to a potential second Donald Trump presidency. The president-elect has signalled intentions to ramp up US oil production and impose tariffs on China, further complicating the demand outlook for the world's top oil importer.
Oil traders are also grappling with a rising US dollar, which makes crude more expensive for overseas buyers, creating additional headwinds. Dennis Kissler, senior vice president of trading at BOK Financial, noted in a client note that the stronger dollar and the likelihood of policy reversals under a Trump administration could significantly reshape energy markets.
“Crude futures are trying to find balance,” he said, “but with a Trump administration likely to roll back most of the Biden administration’s energy policies, equilibrium pricing remains elusive.”
Meanwhile, the FTSE 100 ( ^FTSE ) was lower at the open, retreating 0.3% to 8,044 points. For more details check our live coverage here .
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