The Dollar inched higher last week while Sterling suffered from further Brexit-related pressure. The Euro, along with the Swiss Franc and Australian Dollar were broadly range-bound while the Kiwi Dollar shed about 0.4% to a 3-week low.
Dollar
The Dollar appreciated about 0.5% in trade weighted terms last week to within touching distance of a 22-month high. Positive developments on the trade front between China and the US gave the Dollar a new lease of life, with markets temporarily putting on the back-burner concerns about whether US and global macro data justify the Federal Reserve’s overall view that more rate hikes will be required next year. The Dollar has however slipped 0.3% in the past 48 hours.
Sterling
Sterling’s slide accelerated after Prime Minister Theresa May cancelled a House of Commons vote on the draft Brexit deal which had been scheduled for 11th December. The leader of the ruling Conservative Party did however survive a no-confidence vote on 13 December and Sterling has since stabilised, albeit near a 3-month low. The government will reportedly reschedule the House of Commons vote for early January.
