- Posted by currencies in Brexit, Currency, Economy, EUR, GBP, Inflation, Prime Minister, Sterling, UK, Uncategorised
- March 31, 2017
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Sterling slipped against the dollar again, as investors readied for the European Union’s official response to Britain’s letter of exit from the bloc, as well the final verdict on Britain’s economic output last year.
EU Council President Donald Tusk will send leaders of the other 27 member states his proposed negotiating guidelines for Brexit talks before presenting the main points in Malta two days after British Prime Minister Theresa May formally triggered the two-year withdrawal process.
Meanwhile, revisions to fourth quarter UK GDP (Gross Domestic Product) figures were released at 0930 GMT, giving investors a final snapshot of Britain’s economic performance in 2016 following last June’s Brexit vote. The data came in line with expectation of 0.7% QoQ and slightly lower YoY at 1.9% from an expected 2%. This had no effect on the Sterling value.
Revised U.S. gross domestic product data on Thursday showed that U.S. fourth quarter growth slowed less than previously reported as consumer spending provided a boost that was partially offset by the largest gain in imports in two years.
In contrast, German and Spanish consumer price data disappointed on Thursday, showing inflation slowed more sharply than expected in March as oil prices slumped, offering some respite to the European Central Bank as it faces pressure to wind down its monetary stimulus.
The weaker inflation numbers, along with comments from ECB officials and sources suggesting that the market had moved too far in pricing in monetary tightening, have weighed on the euro, which has fallen almost 2 percent in the past four days.