Insights 
VT 
The United Kingdom’s Gross Domestic Product (GDP) for the first quarter of 2025 exceeded forecasts. The GDP increased by 0.7% quarter-on-quarter, above the expected growth of 0.6%.
The GBP/USD was trading below 1.3300 despite the positive UK GDP data. The pair was supported by a weaker US Dollar amid uncertainties surrounding US trade policies and Fed announcements.
Gold Market Trends
In the gold market, prices continued to decline, reaching a low of $3,135. This decrease was influenced by easing trade tensions between the US and China and reduced expectations for future interest rate cuts by the US Federal Reserve.
In the cryptocurrency market, Shiba Inu experienced a rally despite a previous correction. The increase followed market speculation over a Chinese company’s interest in acquiring $300 million worth of the digital currency.
International trade dynamics between the US and China experienced a positive shift. This was marked by a pause in their trade war, offering the hope that the most challenging market conditions might improve.
That the UK economy grew more than forecast in Q1 2025 gives us a measure of relief, and perhaps a little surprise. A 0.7% quarter-on-quarter rise isn’t staggering, but it’s enough to suggest household spending and industrial output held up better than expected through the winter. Most investors had priced in only 0.6%, giving traders reason to reassess the strength of domestic demand. The beat adds weight to the idea that the Bank of England might show less urgency to loosen monetary policy, at least in the immediate term.
Exchange Rate Observations
Still, sterling didn’t exactly leap higher. The GBP/USD exchange rate remained under 1.3300 even after the GDP release. So what kept the pound subdued? The bigger driver was the US side of the equation — namely, a broadly weaker dollar, which has been on the back foot amid recent hesitancy from the Federal Reserve. Unclear messaging from Powell and company around the timing of any pivot has left dollar bulls without a strong narrative. Meanwhile, the direction of American trade policy under current circumstances has only added to that indecision, dulling appetite for dollar exposure.
At the same time, traders watching gold will have noticed that the shine continues to fade. With bullion down to $3,135, the price action isn’t hard to analyse. Suppose cooler relations between the US and China have rather quickly dampened demand for safe-haven assets. On top of that, expectations are shifting — the Fed is no longer viewed as being in a rush to cut rates, which tends to reduce downward yield pressure and, in turn, makes gold less appealing. As real yields rise, the logic tilts further against holding non-yielding assets like bullion.
The cryptocurrency corner had its own drama. Shiba Inu, which recently came down sharply, staged a recovery. The rebound came not from technicals but on speculation — word spread that a Chinese firm was preparing to purchase a large block of tokens, roughly $300 million worth. We can’t verify every number behind this rumour, but the impact on sentiment was fast and broad. Traders with open exposure in the altcoin universe were left to decide whether to front-run or wait out the volatility. For now, leverage appears to be creeping back into those trades, with implied volatilities climbing across multiple chains.
Global trade, meanwhile, showed faint signs of tilting back towards stability. A notable pause in friction between the US and China triggered mild optimism in risk assets last week. If the two sides manage to keep negotiations from unravelling over the next several weeks, that mild optimism could extend into more aggressive positioning in equity and commodity-linked derivatives. For now, soft indicators suggest some hedge unwinds are underway, though no one seems in a hurry to bet everything on the recovery scenario just yet.
We have observed that positioning across several derivative markets remains relatively cautious, even with the better-than-expected economic signals from the UK and the easing bias in global trade. The key here is not jumping ahead of the data. Event risks, such as central bank minutes and upcoming inflation prints, still carry weight and may cause traders to move in or out proportionally. Forward-looking implied volatility suggests that participants are looking for more clarity before rebalancing seriously.
