It was a relatively quiet day in terms of economic data as the world’s largest economy enjoyed a bank holiday in observance of Martin Luther King Day. Price action, however was volatile after the weekend events where rumours cited that PM May will continue her hard Brexit talks and will argue against single market access. GBP/USD depreciated drastically, surpassing another key psychological level and towards the flash crash lows, whilst GBP/EUR posted a two-month low. There was some fightback from Sterling as a spokeswoman for British PM May said that talk of a hard Brexit is just “speculation” ahead of today’s speech.
It wasn’t all doom and gloom for the Pound yesterday as President-elect Donald Trump complimented the UK. Trump said the UK is “doing great” after voting to leave the EU back in June. In an interview with Michael Gove, Trump promised a quick trade deal between the States and UK after he takes office this week. The incoming 45th President also criticised German Chancellor Angela Merkel’s immigration policies and suggested that Nato are “obsolete”.
The UK’s Prime Minister will be giving a speech and setting out the first blueprint of the Brexit plan today. This will see volatility for the Pound as the details are delivered and reacted to. Further, the UK’s inflation figure is expected again to increase up to 1.4%, pushing closer to the BoE’s target rate of 2% albeit sooner than anticipated.
Have a good day.