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It was another steady day for Sterling, as markets continued to interpret Theresa May’s speech from Tuesday. The Prime Minister gave the currency a much needed boost, stating that unless the UK and EU were able to negotiate a civil divorce package, then Britain would go it alone and leave the single market.
Sterling has gone from strength to strength after May’s speech, in what could be a sign of what’s to come in 2017, especially as the Eurozone has a big year of uncertainty, with upcoming elections in France, Germany and the Netherlands.
US dollar halts decline
The US dollar managed to halt its decline and regained some ground yesterday, especially late in the session, when it accelerated higher following some upbeat comments from Janet Yellen.
Yellen said that with the US at near full employment, and inflation approaching the required targets, we can expect further rate hikes in the coming months, but timing depends on the economy. She continued, stating that she expects more than one hike this year, giving the dollar a further boost.
Data to come
Today, all eyes will be on the European Central Bank’s interest rate decision, and Mario Draghi’s press conference. With rates expected to remain on hold for the time being, much of investor focus will shift towards the tone of Draghi’s comments, gathering any hint of a rate movement later on in 2017. Elsewhere, we have some heavy data out in the US, with unemployment claims being at the fore this afternoon for investors.
