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OCDE Revises GDP Forecast, ECB Sends EURUSD Higher & Oil Prices Surge

Gold higher, as OECD revises GDP forecast

Gold was trading higher on Wednesday, as markets reacted to the OECD’s decision to revise its GDP forecast.

On Wednesday, the group forecasted that global GDP would come in at 3% this year, which is lower than the 4.5% projection in December.

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Global GDP growth is now projected to slow sharply this year, to around 3%, and remain at a similar pace in 2023. This is well below the pace of recovery projected last December.
Growth is set to be markedly weaker than expected in almost all economies. Many of the hardest-hit countries are in Europe, which is highly exposed to the war through energy imports and refugee flows.

The Organization for Economic Cooperation and Development said it opted to adjust its growth forecast, as a result of the Russia/Ukraine war.

As such, they stated that, “The invasion of Ukraine, along with shutdowns in major cities and ports in China due to the zero-COVID policy, has generated a new set of adverse shocks”.

XAUUSD rose by as much as $15 in today’s session before paring gains to $1.80 in afternoon trading.

EURUSD higher ahead of ECB meeting

The EURUSD rate was also higher during today’s session, as traders prepared for Thursday’s ECB rate decision.

On Thursday, the European Central Bank will hold its monthly policy meeting, with inflation set to be a key topic.

Despite historical rises in consumer prices, the bank has opted to keep rates unchanged, with tomorrow expected to be no different.

Markets have projected the bank will keep rates as is, with the expectation that they will be lifted later this year.

EURUSD rose to 1.0714 in afternoon trading on the news.

Oil prices surge to three-month high

Oil prices soared to a three-month high on hump-day, as markets reacted to inventories data from the United States.

Crude inventories unexpectedly increased by 2.025 million barrels last week, versus expectations for a drawdown.

Traders were anticipating that stockpiles would see a fall of 1.917 million barrels in the latest week.

Yet, despite a tight supply of energies, piles continue to rise, as such WTI today rose to its highest point since March.

As of writing, WTI is trading at $122.77 per barrel, its highest point since March 9.

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Eliman Dambell

Senior Market Analyst