15/01/2018 - GBP Climbs Against The Dollar - 15/01/2018
Sterling also improved on its 2017 best against the USD off the back of reports that Spain and the Netherlands favour a soft Brexit. The Pound gained across the board on this positive news. A spokesman for Spain’s economy ministry said the two finance chiefs of Spain and the Netherlands discussed the importance of the UK for both countries, and agreed to keep talking on their common interests while at the same time backing Michel Barnier, the EU’s chief Brexit negotiator.
Underlying U.S. consumer prices posted their biggest gain in 11 months in December, bolstering expectations about a pickup in domestic inflation and about Federal Reserve interest rate hikes this year. The underlying pace of U.S. inflation unexpectedly accelerated in December amid increased housing costs, reinforcing the outlook for the Federal Reserve to raise interest rates several times in 2018. Fed policy makers have pencilled in three rate hikes in 2018 following three last year.
The Euro surged to a more than three-year high against the euro. As it extended its gains on expectations that European Central Bank policymakers are preparing to reduce their vast monetary stimulus programme. Further boosting the Euro on Friday were reports that Leaders of Angela Merkel’s conservative Christian Democratic Union bloc and the centre-left Social Democrats have cleared a first hurdle towards the formation of the next German government after months of stalemate following the election in 2017.
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