- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
- February 1, 2018
- No Comments
Sterling has climbed more than 5 percent since the start of the year as the U.S. currency has weakened broadly and as investors have become optimistic about Britain’s economy and the prospect of a Brexit deal that is more favourable to the UK.
Against the euro, the pound was flat reports that EU officials had told British financiers they will not agree to a deal that would allow finance companies to operate in each other’s’ markets without barriers because Britain has said it will leave the single market.
Leaked analysis showed on Tuesday that Britain’s economy would be worse off after Brexit whether it leaves the EU with a free trade deal, single market access, or with no deal at all. It was another blow to Prime Minister Theresa May.
The dollar briefly clawed back some of its recent falls today after the Federal Reserve said inflation was likely to rise this year, but with expected monetary tightening priced in, traders are waiting to see if upcoming data will give the greenback more than a brief respite.
The dollar, which is stuck near three-year lows after its worst monthly performance since mid-2016, rose in Asian trading before giving up those gains.
The Fed left rates unchanged on Wednesday, which was widely expected. The meeting was current Fed chair Janet Yellen’s last.
The decision came after ADP payrolls processing firm reported that the U.S. private sector created 234,000 jobs in January, beating expectations for a 186,000 rise.
Market participants were now looking ahead to Friday’s nonfarm payrolls report for further indications on the strength of the economy.