Pound Higher After Positive News About Brexit
The euro is falling against the US dollar after the growth at the beginning of the day, while investors are waiting for news about the measures that Europe can take in response to the introduction of US tariffs for imports of steel and aluminum. In addition, political news from Italy can influence the euro. An important event for the pair will be tomorrow's US report on inflation. The Australian dollar and the Japanese yen stay the strongest, while the Canadian dollar is the weakest major currency.
The British pound rose sharply against the US dollar, recovering from a decline to $1.3840. Earlier, the pressure on the pound was caused by the uncertainty associated with the Brexit talks and data that consumer spending in the UK in early 2018 was the weakest since 2012. This strengthened the forecasts of slowing economic growth in the first quarter of 2018. Visa's data showed that consumer spending adjusted for inflation in February was 1.1% lower than a year ago, after a decrease of 1.2% in January. The pound was also supported by news, that UK Junior Brexit Minister Robin Walker said it’s very close to transition deal with the EU. But still, no detail is reported yet.
ECB Governing Council member Jan Smets stays not sure about Eurozone inflation growth, and said that “inflation pressures could take more time to build.” Meanwhile, ECB Executive Board member Benoit Coeure reiterated that interest rates will stay at very low levels far beyond the end of QE.
Economic data from Japan showed, that large all industry index fell to 3.3, down from 6.2. Large manufacturing index decreased to 2.9, down from 9.7. Large non-manufacturing index declined to 3.4, down from 4.5. Machine tool orders increased by 39.5% yoy in February.