31/07/2017 - US Growth Accelerates 

USD

The Dollar received some support during Fridays session after US gross domestic product increased 2.6 percent in the second quarter, meeting expectations.

The economy accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment, which would confirm that the sluggish performance early in the year was temporary. 

The news wasn't all positive as Government figures revealed economic growth in 2015 was the best since 2005 but the momentum ebbed significantly in 2016, with the economy notching its weakest performance since the recession. The annual GDP revision, which covered data from 2014 through the first quarter of 2017, also showed the economy performing worse than previously estimated in 2016.

GBP

Brexit was in the headlines again this weekend after Chancellor Philip Hammond suggested that the UK will not cut taxes and regulations after Brexit to try to undercut European rivals.

Hammond told French newspaper Le Monde that the tax raised as a percentage of the British economy "puts us right in the middle" of the European pack. He went further on to say "I often hear it said that the UK is considering participating in unfair competition in regulation and tax. "That is neither our plan nor our vision for the future.
"I would expect us to remain a country with a social, economic and cultural model that is recognisably European."

This statement contradicts what Hammond said in an interview with German newspaper Welt am Sonntag if whether the UK could become a tax haven. He said he was "optimistic" about securing a good trade deal with the EU but if this did not happen "you can be sure we will do whatever we have to do". "If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term," he said at the time. "In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness."

He also said the bill for Brexit was not a question about money, but how the UK leaves the EU without causing problems for businesses.

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