GBP

The Pound ended 2017 on a high following a set of hopeful and confident economic reports. Sterling gained strength against the Euro following the Catalan election result and is up against the Dollar after President Donald Trump’s tax reform was pushed through.

USD

The Federal Reserve raised interest rates by 0.25% from 1.25% to 1.5%. This strengthened the Greenback as it attracts foreign investors looking for high-yield returns on their investments. The Dollar however ended the year 0.9% down against the Pound and over 1% down against the Euro since the start of the last week. President Trump’s long awaited tax overhaul did very little to help the Dollar and the markets did not seem convinced by Trump’s victory.

EURO

The Euro weakened off the back of the Catalan vote, 3 Separatist parties united to win an overall majority within Catalonia’s new parliament. With 3 of the parties that are to form the coalition all having their own view on what an independent Catalonia should look like, it is a fair assumption that there will be a few hurdles before we get any clear view on just how Spain will handle this. On the other hand, the German coalition talks could be seen as the main culprit for Euro uncertainty recently as Chancellor Merkel’s conservatives have continued to struggle to gain commitment from the Social Democrats to maintain their position at the top

 

The week ahead.

03/01 – EUR – Unemployment Data

05/01 – EUR – Consumer Price Index

  • USD – Nonfarm Payrolls
  • USD – Unemployment Rate
  • CAD – Unemployment Rate