30/05/2017 - US Economy Slows Less Than Expected

USD

The Dollar strengthened on Friday after the headline gross domestic product figure showed the economy slowed less than initially thought in the first quarter, but softening business investment and moderate consumer spending are clouding expectations of a sharp acceleration in the second quarter.
 
The figure showed that GDP increased at a 1.2 percent annual rate instead of the 0.7 percent pace reported last month, in its second GDP estimate for the first three months of the year.
 
Whilst the figure was better than expected the first-quarter weakness is a blow to President Donald Trump's ambitious goal to sharply boost economic growth. During Trumps presidential campaign he had vowed to lift annual GDP growth to 4 percent, though administration officials now see 3 percent as more realistic.

GBP

After a difficult weekend in Theresa May’s bid for number 10 following the televised showdown with Jeremy Corbyn; news emerged yesterday of her approach to the European Commission. May plans to accuse the EU Commission of taking an “aggressive negotiating position” on Brexit.
 
The commission has released two papers setting out details of their approach. One of them indicates the UK should pay already agreed budget commitments up until 2020, as well as some further financial contributions until at least 2021. A separate paper said EU citizens who are in the process of gaining new rights, such as permanent residency, should be allowed to continue after Brexit.
 
We have seen the Conservative poll lead shrink dramatically of late and today May is going to try to emphasise the link between next week’s general election and Brexit negotiations in a renewed pitch to Labour voters.

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