Investing.com - Here are the top five things you need to know in financial markets on Tuesday, January 17:
1. British PM Theresa May set to lay out 'Hard Brexit' plans
Investors looked ahead to a highly-anticipated speech by British Prime Minister Theresa May at 11:45GMT (6:45AM ET), at which she is expected to outline her plans for a 'Hard Brexit'.
Britain will not seek a Brexit deal that leaves it "half in, half out" of the European Union, May will say on Tuesday, according to her office, in a speech setting out her 12 priorities for upcoming divorce talks with the bloc.
Those priorities will include leaving the European Union's single market and regaining full control of Britain's borders, several newspapers reported, reinforcing investor fears of a 'Hard Brexit'.
May has previously stated she will trigger Article 50, which starts the formal withdrawal process from the European Union, by the end of March, but so far has given few details about what deal she will be seeking.
The pound regained strength against the dollar, with sterling rising almost 0.8% to 1.2142 by 5:35AM ET (10:35GMT), up from an earlier low of 1.2018 and compared to Monday's three-month trough of 1.1988.
Ahead of May's speech, the ONS reported that Britain's inflation rate climbed more than expected last month, touching the highest level since 2014, as a weaker pound pushed up consumer prices.
2. Dollar collapses after Trump says currency is "too strong"
The U.S. dollar collapsed toward a one-month low against a basket of major currencies after President-elect Donald Trump warned that the greenback was “too strong,” according to a report in the Wall Street Journal on Monday.
Anthony Scaramucci, a senior member of Donald Trump’s economic advisory council, reiterated that sentiment on Tuesday, warning about the risk from a stronger dollar.
Meanwhile, Trump warned that the border adjustment provision, a feature of House Republicans' plan that would tax imports and exempt exports, is "too complicated."
The comments added to growing uncertainty over U.S. economic policy ahead of President-elect Donald Trump's inauguration later this week.
The dollar index fell to as low as 100.73 earlier, flirting with last week's one-month low of 100.68. It was last at 100.90, down approximately 0.6%.
Against the yen, the dollar was down about 0.8% at 113.25, after falling to a five-week low of 113.00 earlier (USD/JPY).
Meanwhile, the euro rose around 0.6% to 1.0664 (EUR/USD).
3. Global stocks mostly lower ahead of May
U.S. stock market futures pointed to a lower open on Tuesday morning, as traders geared up for the release of more earnings from the likes of Morgan Stanley (NYSE:MS), UnitedHealth (NYSE:UNH) and Comerica (NYSE:CMA). Wall Street was closed on Monday for Martin Luther King Day.
Meanwhile, European equities were lower in mid-morning trade, as investors waited to hear from the U.K. Prime Minister Theresa May on her Brexit plans.
Earlier, in Asia, markets ended mixed, with the Shanghai Composite in China closing up around 0.2%, while Japan's Nikkei slumped 1.5% to a five-week low as a stronger yen weighed.
4. Gold rises for 7th day in a row
Gold prices extended its recent rally to a seventh day, the longest stretch of gains since November, with investors spooked by concerns over Britain's exit from the European Union, while U.S. policy uncertainty lingered ahead of President-elect Donald Trump's inauguration.
Prices of the yellow metal touched a session peak of $1,217.90 a troy ounce, a level not seen since November 22. It last stood at $1,215.65, up almost $20.00, or 1.6%.
5. BAT takes control of Reynolds for $49 billion
British American Tobacco (LON:BATS) has agreed a $49.4 billion takeover of U.S. rival Reynolds American (NYSE:RAI), creating the world's biggest listed tobacco company after it nudged up an earlier offer by more than $2 billion.
BAT, which already owned 42% of Reynolds, will pay $29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26% premium over the price of the stock on October 20, the day before its first offer was made public.