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Pound to benefit from free trade deal
Published on 27.01.2017 22:55

The pound finished slightly lower on Friday but overall racked up its biggest weekly gain since November on the Back of solid local data and the prospect of a free trade deal between the US and UK.

Earlier in the week, data out showed the UK economy jumped 0.6 percent in the 4th quarter of last year, against analysts’ expectations for a figure of 0.5 percent.

For the time being, it seems as if the British economy is brushing off the effects of “Brexit” and carrying on with business as usual.

Prime Minister Theresa may had here firs meeting on Friday with US President Donald Trump with the two leaders discussing an array of things which included a free trade agreement.

May is keen to organize new deals in preparation for when Britain leaves the EU, and Trump seems more than willing to help as it will back up his position that the UK is better off outside the Eurozone,

Both leaders were elected on the promise to tackle immigration so on this point for the moment they see eye to eye,

“Mrs May wants to try to pave the way for a free trade deal with the US post-Brexit and Mr Trump, in spite of his protectionist biases, would probably like to help the UK prosper if for no other reason than to help prove his point that the EU is flawed and the UK is better off outside of it,” said Jim Reid, the head of global fundamental credit strategy at Deutsche Bank.

The Pound is also expected to face volatility next week on Thursday with the scheduled BOE meeting and the release of the Quarterly Inflation Report.

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Andrew Masters

Analyst

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