GBP awaits direction from budget
Written by
Daily Currency Update
There were a number of manufacturing and service releases across Europe and the US yesterday. Across the UK, US and Europe, manufacturing showed contraction but services showed expansion, gauged by being above or below 50.0. However, this macroeconomic data was overshadowed by the ongoing headlines surrounding Trump tariffs and the UK CPI latest, due on Wednesday, alongside the UK budget. Chancellor, Rachel Reeves is expected to confirm that she has less than £10 billion in budget headroom, limiting her ability to stimulate economic growth.GBP/USD tested 1.2900 on the fall overnight, but resistance has since pushed the currency pair higher. GBP/EUR continues to trade under 1.2000, trading as high as 1.1980 over the last week. EUR/USD has slipped since peaking at 1.1950 last week. The currency pair has fallen below 1.1800 over the past 24 hours.
Key Movers
Trump flagged on Monday that tariffs on autos were still coming soon, but indicated that not all of his threatened tariffs on April 2 would be imposed. He stated to reporters that some countries may receive breaks' on duties, but without providing in depth reasoning. The time frame for sector-specific tariffs was also left as an unknown. The comments spurred expectations that the White House may be flexible in its negotiations over exemptions to its levies, offering some relief to investors who have been fretting over the broader economic impact of the trade taxes.Expected Ranges
- GBP/USD: 1.2890 - 1.3010 ▼
- GBP/EUR: 1.1870 - 1.1980 ▼
- GBP/AUD: 2.0410 - 2.0630 ▼
- EUR/USD: 1.0730 - 1.0950 ▲