- US Dollar strengthens on better than expected growth figures
- Pound gets welcome boost from restored Brexit negotiation hope
By Jonathan Russel
US Dollar strengthens on better than expected growth figures
The Pound and the US Dollar remain the two strongest currencies for the week. The USD was supported by better than expected Gross Domestic Product (GDP) data overnight, as well as Federal Reserve Chair Janet Yellen's upbeat comments. The Senate voted to open the debate on the Republican tax plan yesterday, moving another step to a final vote, possibly today, or tomorrow. US President, Donald Trump, said in his usual tone in a rally in Missouri that it's a "once in a lifetime opportunity" and urged Congress to deliver. San Francisco Federal President John Williams also said "as long as the data continue to show steady growth and we see the uptick in inflation that we're expecting that we should continue to raise interest rates slowly over the coming year." The US Dollar remains supported.
Pound gets welcome boost from restored Brexit negotiation hope
Sterling rose across the board to levels not seen since September on Thursday, thanks to hope that some progress is at last being made in the torturous Brexit negotiations. The Pound strengthened following reports on Wednesday that suggested the UK’s “divorce settlement” from the European Union was approaching agreement. UK investors certainly welcomed this prospect, as Sterling climbed to 1.3479. Sterling has also garnered more support this morning as it appears that the UK government is close to a deal over the Northern Irish Border. British officials made proposals to avoid a hard border in Ireland, according to reports in the media. The Irish border is one of the three issues that need to be addressed before talks can move on to trade next year. For now, the Pound looks set to continue its rally.
A busy day for currency markets – key data to watch
Looking ahead, the calendar is very busy today. We have already had Swiss GDP, and still to come, the KOF Swiss Economic Institute report, providing key indicators for the strength of the Swiss economy.
- Germany will release its unemployment data.
- In Europe, inflation and unemployment data are due.
- Later in the day, the US Personal Consumption Expenditures (PCE) is the main focus, while Jobless Claims and Chicago Purchasing Managers’ Index will be featured.