While the UK is beginning its long and uncertain process of leaving the EU, the US carries on picking up momentum. US consumer confidence surged to a 16-year high in March amidst growing labour market optimism. The goods trade deficit narrowed sharply in February, indicating that the economy was regaining momentum after faltering at the start of the year.
Robust consumer confidence and rising household wealth from the house price gains suggest that the Fed’s interest rate policy is being supported.
Fed Chair Janet Yellen tried to spoil the American party by stating that the US labour market still faces significant challenges but the US dollar remained broadly stronger after Donald Trump seemed determined to put tax reforms at the top of his agenda.