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Beat the press

At yesterday's press conference US President-elect Donald Trump said he would avoid conflicts of interest by handing responsibility for his eponymous organization to his sons. He also made threats to pharmaceutical companies, Mexico, military suppliers, intelligence agencies and the press. There was not a word about infrastructure spending or tax breaks.

By the end of it investors were less well-disposed to the US Dollar than they had been at the beginning. The change of heart was demonstrated by the way it fell back, losing the gains it had made earlier in the day and more besides. Over the last 24 hours it has lost ground to all the major currencies, falling by an average of -0.8%. It is down by half a cent against Sterling and by two thirds of a cent against the Euro.

Mixed fortunes for Sterling

Wednesday's UK output figures for November looked good but the trade deficit for the same month was wider than expected. The Bank of England governor told parliament's Treasury Committee that the bank could upgrade its UK economic forecast while the World Bank downgraded its own outlook.

Monthly increases of 1.3% and 2.1% for UK manufacturing and industrial production were well above the expected 0.5% and 0.8% improvements. However, the £12.2bn trade deficit was a billion pounds wider than it was supposed to be. As for growth, where Mark Carney raised the possibility of an upgraded forecast for 2017 (currently 1.4%) the World Bank's prediction went down from 2.1% to 1.2%.

On a wider front the World Bank cited Brexit and President Trump as key uncertainties for the global economy, which it sees expanding by 2.7% this year. It expects the Brexit process to weigh on UK business and consumer confidence while policy changes in the States could take economic growth in either direction.

Reassessing Trumponomics

In the aftermath of Mr Trump's election victory investors were happy to focus on the good news in his concise manifesto; the tax cuts and public spending. Whilst that potential remains, it is beginning to look as though other aspects of the policy mix could dilute its economic benefit.

Mr Trump has obvious concerns about imports - notably from Mexico and China - undercutting domestic products and seems ready to impose punitive import tariffs. He has already made clear his objection to free-trade agreements, implying that it might not only be China and Mexico that he has in his sights.

Investors still like the idea of Mr Trump's stimulus but yesterday's performance made them pause for thought. They may still be thinking today.