{"id":108509,"date":"2021-03-03T12:19:54","date_gmt":"2021-03-03T12:19:54","guid":{"rendered":"https:\/\/fin2me.com\/?p=108509"},"modified":"2021-03-03T12:19:54","modified_gmt":"2021-03-03T12:19:54","slug":"sterling-steadies-ahead-of-uk-budget","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/sterling-steadies-ahead-of-uk-budget\/","title":{"rendered":"Sterling steadies ahead of UK budget"},"content":{"rendered":"

LONDON (Reuters) – Sterling steadied against the dollar on Wednesday and gained against the euro before the announcement of what is expected to be an expansive budget designed to prop up the economy as Britain prepares for a reopening from lockdowns.<\/p>

FILE PHOTO: Pound and U.S. dollar banknotes are seen in this illustration taken January 6, 2020. REUTERS\/Dado Ruvic\/Illustration<\/figcaption>

The pound was 0.1% higher at $1.3979 by 1127 GMT, after falling to its lowest in 2-1\/2 weeks on Tuesday. It was 0.2% higher against the euro at 86.41 pence.<\/p>\n

In a budget speech at 1230 GMT, finance minister Rishi Sunak will promise to do \u201cwhatever it takes\u201d, including a five-month extension of a huge jobs rescue plan, to steer the economy through what he hopes will be the final months of COVID-19 restrictions.<\/p>\n

\u201cOverall, the additional fiscal support announced should underscore the constructive outlook for GBP for 2Q, with further fiscal help facilitating the economic rebound and making the pound the outperformer in the G10 FX space,\u201d strategists at ING said in a note to clients.<\/p>\n

\u201cWe expect sterling\/dollar to breach the $1.50 level in 2H21 and dips below $1.40 should be faded.\u201d<\/p>\n

Sterling is the best performing G10 currency this year, up about 2% versus the dollar as investors bet the speed of Britain\u2019s vaccination programme will enable a faster reopening of its economy, which suffered its worst annual contraction in 300 years.<\/p>\n

Sunak has already racked up Britain\u2019s highest borrowing since World War Two and he will turn to the bond markets again in his budget speech, saying the task of fixing the public finances will only begin once a recovery is in sight.<\/p>\n

\u201cThe question is how Rishi Sunak will balance the need for short-term support while addressing the long-term problem of the deficit,\u201d said Robert Alster, CIO at wealth manager Close Brothers Asset Management, noting speculation over tax rises.<\/p>\n

\u201cAs things stand, the budget isn\u2019t expected to have a particularly notable effect on the markets, but investors will be keeping a watchful eye on how Rishi Sunak chooses to steer the nation\u2019s finances in the coming months.\u201d<\/p>\n

Relief over a last-minute Brexit trade deal signed with the European Union last year and a Bank of England that has pushed back market expectations of negative interest rates has also been beneficial for the pound, which last week hit its highest in 2-1\/2 years.<\/p>\n

Traders will also focus on a speech at 1600 GMT by Silvana Tenreyro, a member of the Bank\u2019s rate-setting committee.<\/p>\n

\u201cMs. Tenreyro represents the more dovish wing at the Monetary Policy Committee and will likely reiterate her support for sub-zero policy rates,\u201d said Valentin Marinov, head of G10 FX research at Credit Agricole.<\/p>\n

\u201cTo the extent that adds to the headwinds for the UK rates and yields, the pound could struggle to perform.\u201d<\/p>\n

Marinov added that the pound is already looking overbought and overvalued and this should leave is vulnerable to corrective moves to the downside.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

LONDON (Reuters) – Sterling steadied against the dollar on Wednesday and gained against the euro before the announcement of what is expected to be an […]<\/p>\n","protected":false},"author":3,"featured_media":108508,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nSterling steadies ahead of UK budget - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/sterling-steadies-ahead-of-uk-budget\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sterling steadies ahead of UK budget - Fin2me\" \/>\n<meta property=\"og:description\" content=\"LONDON (Reuters) – Sterling steadied against the dollar on Wednesday and gained against the euro before the announcement of what is expected to be an [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/sterling-steadies-ahead-of-uk-budget\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-03T12:19:54+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/03\/cnewsfotor93.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/sterling-steadies-ahead-of-uk-budget\/\",\"url\":\"https:\/\/fin2me.com\/markets\/sterling-steadies-ahead-of-uk-budget\/\",\"name\":\"Sterling steadies ahead of UK budget - 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