Home Daily Commentaries UK budget comes into focus for GBP

UK budget comes into focus for GBP

Daily Currency Update

The Conference Board’s Consumer Confidence Index for October rose by over 11% to a reading of 138, U.S. data showed yesterday. This marked the largest one-month increase since March 2021. Meanwhile, job vacancies unexpectedly declined, with the total falling from 7.85 million to a lower-than-expected 7.44 million. This decline comes as worker sentiment regarding the job market weakens. Increased concerns about job security could lead workers to adjust their spending behavior, potentially supporting the Federal Reserve's gradual interest rate cuts.

Ahead of these releases, GBP/USD was trading at 1.2970 but quickly climbed above 1.3000. Similarly, EUR/USD, which had dropped to 1.0780 pre-release, rebounded above 1.0800. In the hours since, GBP/USD has reached 1.3025, and EUR/USD has broken through 1.0850. GBP/EUR, which topped out at 1.2040 yesterday afternoon, has since declined but remains above 1.2000 at the time of writing.

Key Movers

The UK Labour government is set to deliver its first budget after 14 years of Conservative rule. We may see the largest tax hikes in three decades, along with increased borrowing, in light of the Labour Party’s pre-election promises to address the country’s struggling public services. While many of Labour's plans are already known ahead of the budget, any deviations from these expectations could introduce volatility to the GBP today. Additionally, we anticipate GDP figures from key locations, including Germany, Spain, Italy, and the US.

Expected Ranges

  • GBP/USD: 1.2920 - 1.3090 ▲
  • GBP/EUR: 1.1960 - 1.2050 ▲
  • GBP/AUD: 1.9520 - 1.9890 ▲
  • EUR/USD: 1.0760 - 1.0870 ▲

Written by

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry. With over 20 years of experience, Alex works closely with businesses to understand their foreign exchange requirements and align them with solutions. Placing a strong emphasis on customer service, he takes pride in nurturing long-lasting relationships with clients.