Dollar Dips Mildly After US Inflation Report, Pound Jumps on Brexit Hopes

Market Reviews

On currency markets, US dollar turns slightly weaker after consumer inflation data. Meanwhile, British pound strengthens significantly and is trading as the strongest one for today. Euro and Canadian dollar are also firm. On the other hand, New Zealand Dollar is the weakest one.

On stock markets, FTSE added 1.29%, DAX gained 1.29%, CAC rose 2.07%. Earlier in Asia, Nikkei closed up 2.15%, Hong Kong HSI added 1.61%, Shanghai SSE gained 0.31% and Singapore Strait Times increased 1.33%.

British Prime Minister Theresa May is now facing no-confidence vote. Still, investors hope, May could survive this big test for her Brexit deal. Graham Brady, chair of the 1922 Committee, has received at least 48 letters from Conservative PMs for a confidence vote on May. That is over 15% threshold for triggering the request.

Theresa May said she would fight for her premiership with all her might. In a stern warning to opponents supporting Brexit who provoked the challenge, May said that if they overthrew her, then they would have to postpone the exit from the EU and perhaps even stop it.

US consumer price index (CPI) was unchanged in November from a month earlier. Analysts had forecast a 0.1% gain. On an annualized basis, US consumer price inflation increased 2.2% in November, in line with expectations, slowing from 2.5% growth in October. Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, rose by 0.2% mom in November, matching expectations. The annual increase in the core CPI was 2.2%, also in line with analysts’ estimates.