GBP/USD Exchange Rate Steady Ahead of UK Autumn Budget
The Pound US Dollar (GBP/USD) exchange rate is struck trading in a narrow range at the start of this week’s session in advance of the UK’s Autumn Budget.
At the time of writing the GBP/USD exchange rate is virtually unchanged from this morning’s opening levels, leaving the pairing to continue to trade close to a seven-month low.
Pound US Dollar (GBP/USD) Exchange Rate Range Bound as Markets Await UK Budget
The Pound (GBP) is treading water against the US Dollar (USD) and the majority of its other currency peers this morning as investors remain reluctant to alter their positions in Sterling before Chancellor Philip Hammond unveils the UK’s Autumn budget later this afternoon.
The Chancellor @PhilipHammondUK gives his #Budget2018 speech at 3:30pm today. ?
Watch it live ?? https://t.co/h1lCrGOGdP pic.twitter.com/2zYtrBMU9t
— HM Treasury (@hmtreasury) October 29, 2018
This will be the Chancellors first budget since Theresa May announced the ‘end of austerity’ at the Conservative conference earlier this month and so GBP investors will be hoping for a big increase in government spending.
However even if today’s budget includes some major spending plans it’s unclear just how much impact the Autumn Budget will have on GBP exchange rates, especially given Hammond has already warned that today’s budget will need to scrapped in the event of a no-deal Brexit.
Speaking to Sky News on Sunday he said:
‘We would need to look at a different strategy and frankly we’d need to have a new Budget that set out a different strategy for the future.’
Instead the focus may be on the Office for Budget Responsibility accompanying growth forecasts, with Sterling likely to weaken should the economic outlook remain similarly bleak to last year’s forecast.
GBP/USD Exchange Rate Forecast: Will the BoE Strike a More Hawkish Tone in Light of Rising UK Wages?
Looking past today’s Budget to the second half of the week, movement in the Pound US Dollar (GBP/USD) exchange rate is likely to be driven by the Bank of England’s (BoE) rate decision.
While November’s policy meeting is not expected to result in any policy changes from the bank it should provide GBP investors with some insights on the BoE’s current outlook on Brexit and whether the recent upswing in UK wage growth will lead to a more hawkish tone from the Bank in 2019.
Meanwhile USD investors will be focused on the release of the latest US labour report this week, with the US Dollar expected to strengthen if the US registers a sizable bump in payroll figures this month.
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