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REUTERS
March 14, 2018

Sterling climbs after Hammond speech

Business

REUTERS
March 14, 2018

LONDON: Sterling rose to a two-week high on Tuesday as the dollar sold off after data showed U.S. consumer price inflation in February cooled and President Donald Trump said he had fired U.S. Secretary of State Rex Tillerson.

As the dollar began its sell-off, British Finance Minister Philip Hammond gave his half-yearly economic update on the economy.

Hammond upgraded his growth forecasts a little and trimmed his budget deficit expectations, providing some extra wind behind sterling´s bounce higher.

"Currency markets are generally supportive [of tight fiscal policy]," said Neil Jones, head of FX hedge fund sales at Mizuho.

"The Trump firing of Tillerson is giving the pound a further boost on the back of a general dollar sell-off." The pound rose half a percent to a day's high of $1.3984 , its best level since Feb. 27, before falling back slightly to trade at $1.3969.Against the euro, sterling gained as much as 0.2 percent to 88.52 pence per euro before the euro recovered.

Hammond said Britain´s budget forecasters expect the economy to grow by 1.5 percent in 2018, up from a forecast of 1.4 percent in November.

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