Good morning,

Sterling moseys on

It has been good 24 hours if you have pounds in your pocket and wish to sell them. The return on the pound has continued higher throughout the day’s trading as the U.K. has reached an agreement with Brussels regarding the so called ‘Divorce package’ the UK government will give to the European Union.

While the exact content of the alimony is unclear, Prime Minister May has downplayed claims that the sum is in the region on $50BN. GBP can continue higher if the other, pertinent quandaries such as Ireland and domiciled Citizens rights are resolved.

Eurozone inflation misses target

The Euro’s decline against the Dollar continued as price inflation missed the European Central Bank’s targets and analysts’ expectations. Core Inflation (everything but volatile components such as energy, food and booze) remained a steadfast 0.9%. This supports the Draghi’s M.O. to taper the stimulus program gradually.

Tic-tax-toe

Speaking in Missouri, President Trump said, “Middle class families…will receive a raise of $4,000 on average!” in attempt to cajole his party and pass the biggest legislative effort since the Healthcare Bill back in the summer. The President’s effort with the bill has thus far led to its remarkably rapid progress through the House into the Senate – in less than one month.

We expect that any sort of deal for the GOP will be perceived favorably by the market and anything less than a deal will not be. USD GDP came in strong yesterday at 3.3% vs. 3.0% forecast.

Governor Poloz at the BoC

Governor Poloz spoke yesterday around the release of the financial system review for the Bank of Canada. While the contents of the review aligned with expectations, his reflective comments hurt the Loonie. He posited that even if the BoC hikes rates in March, the full effects would not filter through to the economy for 6-8 quarters, which has moved CAD lower. If this sentiment continues in the months ahead, it will do nothing to support CAD progress against the Greenback.

A piece of the crypto pie

In other currency news, I pondered over my decision not to invest in Bitcoin as the Crypto Currency bolted past $11,000 for the first time, representing a neat return @ 874.3 % YTD (sad face!). Many news agencies are reporting that the Fed is also looking into developing a crypto of its own – it seems everyone wants a piece of the action.

Have a great day.

Christopher Morriss, Client Relations Manager