Markets continued to digest Wednesday evening’s Fed rate rise and hawkish 2017 plan that gave the Greenback a sizeable boost, pushing the Dollar to its strongest level against the Euro in 13 years. EUR/USD and GBP/USD soared lower yesterday, tearing through key levels at the prospect of more interest rate increases by the Federal Reserve next year, anticipating now three rate rises in 2017.
Closer to home the Bank of England, as expected, held interest rates at record lows of 0.5% and kept their asset purchase plan constant at £375bn yesterday morning. Also, yesterday morning the UK posted their retail sales figure for November. Retail sales in the UK fell dramatically from last month’s 1.8% to 0.2% as consumers begin to save ahead of Christmas.
The week closes with the Eurozone posting their inflation figure. Inflation has been showing good signs of late that it is on the rise since going into deflationary territory earlier in the year, so this last reading for 2016 is due to remain at the 0.6% level showing signs of heading in the right direction.