Rubicon Crossed?
GBP: The day of the budget is here. Sterling has been dominated recently by anxiety and concerns surrounding the budget, filled with leaks, productivity concerns and significant fiscal gaps. However, Sterling has slightly firmed as some in the market determine that these risks are already priced in and that we are in a ‘sweet spot’. Overall, the perception of Chancellor Rachel Reeves’ budget at 12:30pm today, compared to the prevailing market perception, will decide the direction of Sterling.
EUR: The Euro has traded unevenly due to geopolitics and economic data determining market sentiment. The progress surrounding the Russian Ukrainian peace deal has led to optimism and support for the Euro, however this optimism was offset by recent German economic data which showed that economic growth had stalled. Due to limited upcoming economic data, focus has shifted to the upcoming speech by the ECB President Lagarde wherein any renewed emphasis on weak Eurozone growth has the potential to further pressure the Euro.
USD: The US Dollar weakened due to soft economic data and reduced geopolitical risk. There is increased belief, by some in the market, of a Fed interest rate cut due to sluggish retail sales, a fall in consumer confidence and softer core producer prices. Alongside this, there has been further signs of progress towards a Russian Ukrainian peace deal which has seen a fall in ‘safe haven’ demand. Overall, taken together, these factors are likely to suggest a more cautious outlook for the US Dollar.
If you would like to discuss your exchange rates, have any questions about the market or would like to learn more about how we could help, please get in touch.
T: +44 203 440 7550 | E: info@spectrumfx.co.uk | W: www.spectrumfx.co.uk
