he greenback has been buoyed by comments from Chair of the Federal Reserve Janet Yellen, who again hinted on Tuesday evening that another interest rate hike in the US was likely in December. News on possible fiscal reform also supported the currency after months of doubt over whether President Trump would be able to force through his plans to ramp up infrastructure spending and cut taxes this year. Trump last night proposed the largest tax overhaul in the country in three decades, although somewhat disappointingly, failed to provide any concrete details. Reports have suggested that American corporations could see their tax rate slashed to 20% from the existing 35% level.

Yesterday’s durable goods orders data provided further weight to the argument for higher interest rates in the US this year, while suggesting that growth in the world’s largest economy could surprise to the upside in the third quarter of the year. Durable goods orders increased 1.7% in August after a fairly dire performance in July that marked the largest decline in the measure since 2014.

Currency traders now look ahead to this afternoon’s US GDP data, which could provide further impetus to the US Dollar rally if it surprises to the upside. Fed member speeches continue to come thick and fast this week with FOMC’s George and soon to be departing Vice-President Fischer on the docket this afternoon.

Pound hits two month high on Euro after solid sales data

Sterling had another impressive day against the Euro, briefly edging above the 1.14 mark to its highest level in two months. British retail sales growth rose to a two year high in September according to the latest data out of the Confederation of British Industry. The CBI distributive trade survey jumped to 42 this month from a reading of -10 in August, well above even the most optimistic of forecasts and its highest level since September 2015.

Meanwhile, the Euro staged a late rally during afternoon trading to end the London session more-more-less unchanged. The common currency remained on the back foot following the weekend’s election result in Germany and investors profit taking following the Euro’s recent rapid appreciation. A number of ECB officials, including Praet and Lautenschläger, will be making public appearances today and will be closely watched for any comments on monetary policy. The monthly business confidence data at 10:00 UK time is not expected to rock the boat and barring any significant surprises the common currency is likely to be driven by events out of the US today.