Currency Report Day of the Budget

It has not been the best couple of weeks on the currency market for the Pound as it is seemingly in free fall with the uncertainty looming with the ongoing Brexit negotiations. Yesterday Sterling lost around half a cent on the Euro and over half a cent on the continued Strength of the Dollar. House pricing data from the UK came in 0.2% lower than the expected 5.3% while GDP figures from the Eurozone were as predicted at 1.7%. The US posted under expectation on trade balance which Sterling recovered ever so slightly on but with sentiment hugely with the Greenback the gains were minimal.

Today could be a volatile day on the currency market with the Chancellor Phillip Hammond bringing his little red box to the house of commons to deliver what is his final Spring budget as it was announced last year that there would only one budget held in a year. Normally the budget would not have a significant impact on the Currency market, but the Chancellor may take a cautious approach due to the UK’s European exit. The chancellor has already spoken of “fiscal discipline” as Britain heads towards Brexit negotiations just weeks away from triggering Article 50.

Theresa May is facing a second defeat in the House of Lords as peers call for parliament to be given a ‘meaningful vote’ on the Brexit deal. This brings more uncertainty for when Article 50 is to be invoked, it also brings further uncertainty amongst investors and with sentiment heavily against the pound as of late this could further harm the Pound going forward. With Sterling in such a fragile state, the news on delayed finalised Bill to leave the Eurozone only puts the Brexit situation in further limbo. When the deal is finally passed through the house of lords for article 50 to be triggered Sterling could potentially spiral down to levels it experienced against the Euro when the UK first announced the decision to leave the Eurozone. If you have an immediate Euro requirement get in touch with us here at Currency Index to discuss your options to minimise your risk in these uncertain times.

Elsewhere today on the data front there is not too much of great significance to majorly shake up the rates however there are a few bits to be aware of that may have an impact. In the morning at 8.15am CPI data is released in Switzerland, later in the afternoon the US will post-ADP Employment at 13.15pm, at the same time in Canada housing starts will be posted. At 13.30pm the US will release Unit labour costs along with Non-Farm Productivity, in the early evening staying in the US, ten-year note auction will be posted at 18.00pm.