The pound started the week on the front foot, trading at 1.1585 against the euro, and 1.2448 against the US dollar.
The UK economy expanded by 0.6% in the fourth quarter of last year, the same rate as the 2 previous quarters, it’s thought that consumer spending is the key driver behind this growth.
EUR.
A relatively quiet week for the euro as Donald Trump and Theresa May are keeping the spotlight firmly on the US dollar and pound.
Professor Ted Malloch, the man tipped to be Donald Trump’s ambassador to the EU thinks the euro could collapse within 18 months, and said he would short it. He also said that Britain could agree a mutually beneficial free trade deal with the US in as little as 90 days.
US
The US dollar started the week under pressure as traders are nervous following Donald Trump’s inauguration speech on Friday. Trump’s vow to put America First is causing worries about protectionism and trade wars.
On Monday Donald Trump signed an executive order to scrap the Trans-Pacific Partnership. The 12-nation trade deal was a huge part of Obama’s Asia policy and yet to be ratified by congress. Trump described the trade deal as “a potential disaster for our country". In its place, he said he would "negotiate fair bilateral trade deals that bring jobs and industry back”.
Trump is also expected to sign an executive order to renegotiate the North America Free Trade Agreement (NAFTA) the trade agreement was enacted in 1994 between the US, Canada and Mexico and was designed to eliminate trade tariffs between the three nations.
The dollar remained under pressure as Donald Trump continued to make headlines. Firstly, stating that he intended to begin construction of the US-Mexican border wall in the next few months. Trump also said in a TV interview that he believed torture works when interrogating terror suspects.
Elsewhere
America withdrawing from the Trans-Pacific Partnership will have been a big blow for Australian and New Zealand producers, however, it could be a huge opportunity for China as it looks to cement its place as a key player in the Global economy.
Over the past 3 years China has pursuing a geopolitical plan called “One Belt, One Road “The plan seeks to connect countries in different continents to trade and is centred around China.
China hopes to build more sea ports which would create a 6000 kilometre sea route connecting China to South East Asia, North Africa and Oceania.
