Stay in step with market opportunities and get insights, actionable trade ideas and dedicated support.
The focus in UK markets is turning to the Autumn Budget on Wednesday and ahead of it we have seen a mild recovery in the GBP/USD, which has found support as the US dollar recovery has paused ahead of the release of US retail sales and PPI inflation data today.
The UK spring budget is set to be released tomorrow. And if GBP/USD follows its general pattern around this budget, it could be in for a tough few days - starting from today.
Market Reaction to Sunak's Spending Spree
In addition to using monetary policy to stem the economic fallout, many countries have announced fiscal stimulus plans.
A strong response from global policymakers may be the sign traders need to see for equity markets to form a bottom...
Buying Momentum Falters Asian markets pushed higher overnight, with the exception of the Shanghai Index, which was nursing losses following dismal Chinese industrial profits. Europe also started in the black, although European bourses were back in the red by midway through the European session.
The UK Chancellor Phillip Hammond has delivered the UK’s budget today. Although he declared that the era of austerity is "finally coming to an end," sterling bulls were not impressed. The EUR/GBP hit its highest level since early October near 0.8900, while the GBP/USD hit a fresh session low beneath 1.2800 after the Chancellor had finished his speech.
<p>It is going to be a big day for the UK assets with the budget due for release shortly and after this morning’s slightly stronger than expected jobs and wages data. Although Chancellor George Osborne is expected to announce few surprises at this budget, certain stocks and/or sectors will be impacted in one way or the other. The pound is also likely to turn volatile should Mr Osborne deliver a surprisingly cautious or surprisingly optimistic economic policy updates. But according to the latest ONS data, the UK economy is not doing too badly for the number of people claiming unemployment-related benefits has dropped to the lowest level since April 1975. Added to this, wages are continuing to grow, with earnings including bonuses rising by an above-forecast 2.1% year-over-year in the three months to January, compared to 1.9% previously. It could also be that Brexit risks are overstated, although as my colleague Matt Weller highlighted yesterday, a Telegraph’s poll suggests that there is a clear enthusiasm gap in favour of leaving the EU. But today, traders are likely to put Brexit fears on the backburner and instead concentrate on the budget and then the FOMC statement/press conference later in the day.</p>
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
