GBP/USD: Markets overlook budget concern – Scotiabank

The Pound Sterling (GBP) is a mild outperformer on the session, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP outperforms moderately

“Markets were showing some signs of concern yesterday over an adjustment in how UK debt is measured for setting UK fiscal rules.”

“This will allow the government to borrow a lot more in next week’s budget potentially. The announcement by Chancellor Reeves Thursday pressured UK Gilts. Markets appear less perturbed this morning, however, with UK bonds outperforming European debt slightly.”

“GBP was showing some positive signs on the intraday chart yesterday and while progress has been limited, short-term technicals still offers some tantalizing signs of potential gains this morning. Spot is testing minor trend resistance at 1.2980 and a clear push above here should prompt additional gains to the 1.3050 zone over the next 1-2 days.”

“Support is 1.2945/50 and 1.2910.”