With UK inflation data due next week, the markets will be watching for how the Bank of England will respond if Inflation jumps.
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Next week we are expecting GDP data as well as US Income and Spending figures, and a speech from FED chairlady Janet Yellen. All of which will be closely watched by the markets.
Last week’s US interest rates rise (to 1.25%) came as no surprise to the markets, however the upbeat tone from the FED that has followed has resulted in US Dollar strength.
Since the UK’s Brexit vote last year the EURGBP exchange rate has moved significantly. With Brexit negotiations beginning today how will the pair be affected moving forward.
This morning UK and EU negotiating teams, including David Davis and Michel Barnier, met to begin what is likely to be 18 months of Brexit talks. If progress is made early on this could have a positive effect on the Pound, however any stall in negotiations could have the opposite effect.
With three months already having passed since the UK triggered Article 50, confirming their intention to leave the EU, Michel Barnier, the EU’s chief negotiator has suggested time is running out to start Brexit negotiations.
This evening could see the US Federal Reserve raise interest rates for the second time in 2017. One of the main drivers for this is a recent upturn in US economic growth and the announcement that the US Unemployment rate of 4.3% is at a 16 year low.
Today the GBP/EUR rate dropped into the 1.12s for the second time in a week following the UK Election last Thursday. A poor start to Brexit negotiations, beginning soon, could see the exchange rate drop into the 1.10s.
Yesterday James Comey, former Director of the Federal Bureau of Investigation gave testimony to the US Senate on his relationship with Donald Trump.
The Conservative party’s gamble has backfired and the election has resulted in a hung Parliament. The Conservatives are still the biggest party, however while they were hoping to gain more seats and strengthen their position for Brexit negotiations they have actually lost 12.
Earlier today President of the European Central Bank, Mario Draghi revealed that the Eurozone interest rate will be held at 0%, whilst also saying he would not be cutting back stimulus measures.