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GBP Reaction to UK Budget Today (James Lovick)

Wednesday, March 8, 2017 11:17
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(Before It's News)

This afternoon saw Philip Hammonds first budget which saw the pound fall against most currencies. This was really an interim budget to keep the ship steady with Brexit approaching with more drastic action likely to be taken in the Autumn budget. The market reaction for the pound was not inspiring although there was a sharp improvement in the growth outlook for 2017 which could bode well for the pound.

One highlight in particular was additional funding for Scotland, Wales and Northern Ireland. The move could help smooth tensions particularly in Scotland where talk of a second Scottish referendum continues to appear in the headlines. This could actually help support as the intention of the sweetener is to keep the Union together,

GBP USD Falls after Strong US Employment Data

For US dollar exchange rates Friday sees US nonfarm payroll numbers which will be an essential data release for the direction of the dollar. The US Fed have been extremely hawkish in their approach to interest rate increases this year and have signalled three hikes for 2017. Fridays’ data is perhaps the last economic data that could change the Feds mind on whether it will raise interest rates next week.
A significantly weaker number would most likely see the US dollar weaken although considering the stronger employment change numbers from the US yesterday which smashed through expectations it would suggest the number could actually be strong come Friday. Stranger things have happened and it is always a difficult one to predict but the markets to appear to be braced for a big number. Those clients looking to sell US dollars could see a small improvement on Friday if the numbers impress.

If you would like further information on sterling exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]


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