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Sterling gains after budget update

The pound has gained this morning as the dollar was dumped by investors as data showed U.S. consumer price inflation in February cooled and President Donald Trump said he had fired U.S. Secretary of State Rex Tillerson.

British Finance Minister Philip Hammond gave his half-yearly economic update on the economy. Which was positive.
Hammond upgraded his growth forecasts a little and trimmed his budget deficit expectations, providing a boost to sterling.

Hammond said Britain’s budget forecasters expect the economy to grow by 1.5 percent in 2018, up from a forecast of 1.4 percent in November. That would help the government lower its expected borrowing in the run-up to Brexit.

With Britain stuck in negotiations with the European Union to try to agree to the terms of a transition deal to cover the period after it leaves the bloc, Brexit had been overshadowing other influences on the pound.

After the pound performed well in January, renewed concerns about the state of Brexit talks after the EU rejected some British proposals for a trade deal last week had weighed on sterling in recent weeks, as had a recovery in the dollar.

The junior Brexit minister Robin Walker said on Monday that Britain was very close to agreeing to the details of the implementation period with the EU for its transition out of the bloc. Britain is due to leave in March 2019.

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