The protagonists of the last week was undoubtedly the Brexit and the activation of Article 50 by Theresa May.
Wednesday, March 29 the Brexit has finally begun and the United Kingdom formally launched the divorce proceedings from the European Union.
Expectations of large movements on the currency market and in particular on the British pound have not been fully confirmed.
The pound, in fact, changed slightly after the trigger of Article 50 and it exchanges stably around 1,2458 against the dollar. We must consider that pound, the worst among G10 currencies earlier this month, now moves towards its first quarterly rise against the dollar since the middle of 2015.
On the other hand, to suffer more the statements of Wednesday was the EUR / GBP currency pair that slipped from 0,8684 to 0,8628 before recovering later.
EUR / GBP has however reversed the trend from the recent leap that took it on a bullish longer term trend at 0,87. Despite now EUR / GBP is back to travel downward, many economists do not stop to look at 0,90, which reminds us that not long ago the currency pair was traveling at a maximum of 0,9229 (late September 2016).
Talking about market movers, on Friday it was realized also the Gross Domestic Product of the United Kingdom that resulted below expectations with a +1,9% on an annualized basis in the fourth quarter.
Among the most important market movers of the week we have to highlight undoubtedly those relating to inflation of Italy and the Eurozone.
Italian inflation on a monthly basis marked a change of 0%, while in the previous survey was +0,4%. Analysts had expected a slight increase of 0,1%.
On an annual basis, however, the inflation has scored a +1,4%, compared to +1,6% of the previous survey and against +1,5% expected by the consensus.
The increase of 1,4% recorded on an annual basis was determined once again by the prices of non-regulated energy prices which have risen by 11,5%. On the upside, though less than the previous month, the prices of food products unprocessed to +6,1% and the prices of services related to transport to +2,5%.
Inflation in the euro area slowed in March, moving away from the ECB’s target of 2%.
The slowdown in consumer prices in the euro area in March, reported by Eurostat, showed that inflation has recorded an annualized increase of 1,5%, compared to + 2,0% reported in February.
In the same week, it was also published the data on the consumer confidence of the Euro zone. It remained stable in March (-5), exactly as predicted by analysts.
The indicator of the companies health remains at 0,82, while the industrial sentiment moves from 1,3 to 1,2.
Moving to the United States, the Gross Domestic Product was better than expectations in the last quarter of 2016.
US GDP increased by 2,1% in annualized calculation, compared to +1,9% reported previously and upward compared to the estimates of analysts, who expected an increase of 2,0%.