'Budget For Growth'
GBP is looking a little firmer today ahead of Chancellor Jeremy Hunt’s Spring Budget due just ahead of the US changeover. The budget, which has been billed as a budget for growth, is widely touted to include a slew of measures aimed at helping UK households cope with the cost of living crisis. Among these, a £4 billion boost to childcare along with extended help on energy bills as well as further benefits and pensions reforms will be the main focus of the budget. Additionally, the government is reportedly creating 12 new investment zones as part of the Treasury’s plan to stimulate economic growth.
Market Impact
While the budget might well be seen as a near-term boost to the UK growth outlook, there are fears over the longer-run impact increased public spending will have at this point given that inflation remains at elevated levels and financial conditions remain tight. Unless there are any surprises today, the budget is unlikely to be a major market mover for GBP/UK assets, particularly given the recent market turmoil we have seen. However, it might well factor into the BOE’s decision when it meets later this month. Near-term, the budget is likely to provide a mild boost for GBP while asset prices will largely reflect the broader risk environment.
Technical Views
GBPUSD
The recent downside break of the triangle pattern was seen stalling into support at the 1.1891 level with price subsequently reversing higher to trade back up into the triangle. Price is now testing the 1.2195 level mid structure. With momentum studies turning bullish, the focus is on a further push higher and a test of the triangle top next ahead of the 1.2659 level above.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.