GB POUND
Another bad start to week for the pound, it started the week trading at 1.1345 against the Euro, and 1.2033 against the US Dollar as fears around “Brexit” are making investors nervous.
Theresa May made a key speech at Lancaster house on Tuesday to outline Britain’s negotiation strategy for leaving the EU, many investors fear leaving the single market, the so called “hard Brexit”
Inflation in the UK has increased to 1.6%. Rising air fares and higher food prices are the key driver behind the increase, inflation is now at its highest level since 2014.
Theresa May delivered her 12-point key note speech on Tuesday
May’s 12 objectives were as follows:
- Provide Certainty Whenever Possible
- Have Control Over Laws
- Strengthen the United Kingdom
- Keep a Common Travel Area
- Have Control Over Immigration
- Ensure the Right to Remain for UK Nationals Living Abroad and EU Nationals Living in the UK
- Protect Workers Rights
- Construct a Solid Trade Deal with the EU
- Create Trade Deals with Other Countries
- Continue to be a Leader in Science and Innovation
- Continue Cooperation on Crime and Terrorism and Foreign Affairs for Security
- And Ensure a Phased Implementation Process
EURO
The ZEW survey for both Germany and the eurozone failed to hit its forecast
Inflation in the eurozone came out as expected, month-on-month the figure was 0.5%, year-on-year the figure was 1.1%.
The ECB voted to keep the minimum bid rate at 0.00%.
US DOLLAR
Ahead of his inauguration on Friday Donald Trump gave his first UK interview with the Times. Mr Trump said that he thought the UK was “so smart in getting out” he promised a quick trade deal with the UK, and he also criticised Angela Merkel’s immigration policy and Nato.
On Friday Fed chair Janet Yellen said that she expects to raise rates a few times each year till 2019, she also said “the economy is near maximum employment and inflation is moving toward our goal”.
Elsewhere
China’s economy grew steadily in 2016 but missed its top end target of 7% according to China’s president Xi Jinping. Speaking in Bern he said that China’s economy grew around 6.7%, but it would still be one of the best performing global economies.
