The Pound experienced its best week in seven after recent sterling weakness, although the end of last week saw quiet trading in the run-up to the holiday period and the January parliamentary vote on the prime minister’s Brexit deal.
There have been signs that despite the uncertainty of Brexit, Britain’s economy has been fairly resilient. Retail sales data came in above expectations on Thursday and data on Friday showed that the British economy was 0.6 percent larger year-on-year in the third quarter.
Thursday also saw the latest Bank of England releases, with the interest rate remaining unsurprisingly unchanged. Bank Governor Carney warned about the growing risk of a no-deal Brexit, reflecting fears amongst traders that the United Kingdom could quit the European Union in March without a transition deal to minimise disruption.
January is set to be an extremely volatile month, with all eyes on whether Theresa May can surprise and gain parliamentary approval for her Brexit deal.
The US released disappointing figures on Friday with Core durable goods and final GDP coming in below forecast. Orders placed with factories in the US for business equipment fell in November, missing forecasts for an increase and adding to signs that demand is slowing amid risks from the trade war with China.
The Commerce Department showed third-quarter GDP grew at a 3.4 percent annualized rate, revised from 3.5 percent and still amounting to the fastest two-quarter growth performance since 2014. This reflected downward adjustments to consumer spending and net exports.