Sterling rose in European trade after sustaining heavy losses recently, holding above two-year lows against dollar, while still on track for the fourth weekly loss in a row. 

GBP Pricing

GBP/USD rose 0.3% to 1.2231, after losing 0.4% on Thursday, the sixth loss in a row, marking two-year lows at  1.2165.

Sterling is down 1% this week on track for the fourth weekly loss in a row. 

Bearish Data

UK data showed growth at 0.8% in the first quarter, missing estimates of 1%, and down from 1.3% in the previous quarter.

On a monthly basis, UK economy contracted 0.1% in March, compared to a 0.1% growth rate in February.

Such data cut down chances of several more UK rate hikes in 2022.

BoE Estimates

Bank of England decided to hike rates by 25 basis points last week to 1%, the fourth increase in a row.

The members are preparing for another 25 basis points, however they warned from a recession if rates were increased by 0.50%.

It didn't stop at this, the BoE went as far as predicting an actual recession next year by 0.25%.

US Dollar

The dollar is trading near 20-year highs once more at 104.92 against a basket of major rivals.

US inflation data astounded expectations once more and paved the way for a rate hike next month.

Estimates

As for the pound, analysts now expect it to fall as low as 1.2 while potentially even piercing that important barrier in the months to come.

Oil futures rose nearly 1% in Asian trade with US crude rebounding from April 26 lows, while Brent climbed off April 25 lows as well, as the dollar index declined away from 2002 highs.

Markets are assessing the Chinese Covid 19 crisis, which impacted demand, and the latest developments in the Ukrainian crisis, with the EU now backing off from threats on banning Russian oil supplies.

US crude June futures rose 0.86% to $107.56 a barrel, while Brent futures due in July rallied 1.08% to $109.17 a barrel, as the dollar index slipped 0.14% to 104.62.

From the US, import prices are expected up 0.6%, slowing down from 2.6% in March, while the UoM consumer sentiment index is expected down to 64.1 from 65.2.

Several Fed officials are expected to speak today and possibly hint at the future of monetary policy in the US.

Fed Chair Jerome Powell said in earlier remarks the economy could handle two more 0.50% rate hikes in a row, to arrest the runaway inflation.

He expressed how difficult it's going to be to control the surging prices while ensuring continued support for the labor market.

Official US data showed crude inventories rose 8.5 million barrels last eek, while analysts expected a 1 million barrels deficit, with total stocks now rising to 424.2 million barrels.

Gasoline stocks fell 3.6 million barrels, down 5% from 5-year averages, while distillate stocks fell 0.9 million barrels.

Chinese authorities is clamping down heavily on any opposition to its zero-covid harsh policies against the pandemic, in order to contain the crisis quickly and return to solid growth.

China's central bank has issued statements asserting full support of the economy to provide enough liquidity and underpin small businesses.

Latest World Health Organization data showed global Covid 19 infections up to 516.92 million cases, with the death toll hitting 6.259 million.

Baker Hughes data showed US oil rigs rose by 5 rigs to 557 rigs, the highest since March 2020, while US output steadied at 11.9 million barrels.

US output is down 1.2 million bpd or 10% from a record high at 13.1 million bpd scaled in March 2020, while hitting a record low in August 2020 at 9.7 million bpd.

US Stock indices tumbled on Thursday following a batch of weak data and concerns about US inflation.

US producer prices rose 0.5% in April, matching estimates and compared to March's 1.4% rise.

Core prices, excluding  food and energy, rose 0.4%, missing estimates of 0.6%, and down from 1% in the previous reading. 

US unemployment claims rose to 203 thousand in the week ending May 7, missing estimates of 190K and compared to the previous reading's 202K, revised from 200K.

Dow Jones ell 0.7% as of 14:06 GMT to 31,608, while S&P 500 slid 0.9% to 3,899, as NASDAQ gave up 0.9% to 11,261. 

Palladium prices declined on Thursday as the dollar strengthens against major rivals, after palladium gave up earlier gains after Russian launched an attack against Ukraine. 

The UK government announced plans to hike customs on palladium and platinum imports from Russia. 

Palladium is extensively used in electronics, and in car parts used to cut down emissions. 

However palladium and other metals became under recent pressure as Chinese demand fades due to a new Covid 19 wave over there.

Dollar's strength is also weighing heavily on palladium and all commodities, after hitting 20-year highs recent on haven demand. 

The gains came as the Fed plans multiple rate hikes throughout the year to arrest inflation.

The dollar index rose 0.6% as of 13:42 GMT to 104.5, with a session-high at 104.7.

Palladium 

Palladium futures due in June fell 7.3% as of 13:$3 GMT to $1,870.5 an ounce.

Copper

Copper futures due in July fell 3.4% to $4.06 a pound as of 13:39 GMT.