The U.S. Dollar recovered its losses from yesterday’s session as economic data, once again, aided the greenback’s value. After weeks of positively correlated dollar fluctuation and market surge, major banks are reconsidering the effects of Trump’s policies on long-term growth. However, current figures point to a stronger economy than forecast and it is certainly expected that the Fed will hike its Federal Funds Rate by 25 basis points when they meet on December 14th.
Gross Domestic Product numbers exceeded estimates as quarter-on-quarter growth registered at 3.2% over the 3.0% expectation. Core PCE (Personal Consumption Expenditures), the Fed’s favored measure of inflation, met its 1.7% target. Meanwhile, Personal Consumption rose by 2.8% over its expected 2.3% pace. USD climbed against its major peers and the already struggling resource-based currency market.
Pound Sterling reversed some of its losses, surprisingly, after dovish comments from ECB President Mario Draghi in regards to the perils of a “hard Brexit”. The central bank official spoke to European lawmakers about the upcoming process and how it will definitely hurt Britain the most.
On a curious note, an assistant to Conservative Vice-Chairman Mark Field was photographed carelessly holding on to notes about Brexit talks within government officials. A captured note in particular read “have your cake and eat it,” going viral across UK news outlets because it is considered the current negotiation strategy.
Prime Minister Theresa May’s office said it was not representative of any official policy. GBP could play a role as a safe-haven in the midst of uncertainty when it comes to Trump and global trade.
Yen fell once more and is about to close its worst month of losses since 2009. The biggest driver has been speculation that a Trump presidency will mean a tighter monetary policy in the U.S., thus Yen falling sharply on policy divergence. Some analysts, however, are saying that it is important to be careful because if markets start tumbling Yen could appreciate to levels seen in 2012 where the safe-haven Yen reached 30-year highs. Volatility remains high as this strange year comes to an end.