Daily Currency Update

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Sterling awaits the budget announcement

GBP - British Pound

UK monthly CBI realised sales posted a strong 30 yesterday against an estimated 14. This is the second highest reading since July 2018 showing strong consumer demand and is an indication of the higher prices we have seen recently. The news helped Sterling strength yesterday morning, helping GBP/USD back through 1.3800.

Today’s big news will be the budget from Chancellor Rishi Sunak. A lot of the budget content has already been leaked, with another leak overnight spelling out that the current public sector pay freeze will come to an end in April. Investors will likely be interested in the economic and borrowing forecasts, but if there are minimal sound bites on both GBP movement could be reduced.

GBP/USD slipped below 1.3800 at midday yesterday and has been on a steady decline since. The currency pair has dropped below 1.3750 overnight. GBP/EUR has seen a similar drop, but the range has been narrower.

Key Movers

There were two notable data releases from the US yesterday. Richmond manufacturing index posted 12 against a forecast figure of 4, indicating improving conditions. Released at the same time Tuesday, the CB consumer sentiment survey beat forecast coming in at 113.8 versus the 108.4 predicted.

EUR/USD dropped below 1.1600 yesterday and GBP/USD fell back below 1.3800. Later today the UK budget will be released, and the European Central Bank policy statement on Thursday. Both currency pairs could remain volatile in the build up to the releases.

Expected Ranges

GBP/USD: 1.3680 - 1.3790 ▼

GBP/EUR: 1.1810 - 1.1890 ▼

GBP/AUD: 1.8240 - 1.8390 ▼

EUR/USD: 1.1560 - 1.1620 ▼