The UK press is starting to reach a fever pitch with its speculation about what Chancellor Rachel Reeves will present in her first budget on October 30, says Chris Turner, FX analyst at ING.
Correction towards 1.29 area seems likely
“Critics argue that the budget should have been presented earlier, which would have prevented this policy vacuum from being filled by other news. Investors remain on the lookout for any signs that the UK Gilt market is getting nervous again about the possible spending plans.”
“It’s true that the 10-year Gilt-Bund spread has widened 25-30bps in the last month, although that may be as much due to the miserable eurozone data as anything else. Likewise, the UK sovereign CDS at “In five years it has barely moved from a very tight 21bps, suggesting there has been no risk premium in UK asset markets.”
“That said, it is becoming clear that the US Dollar (USD) will remain a little stronger until the US elections in November. This means that we have not seen the lows for GBP/USD. A correction towards The 1.29 area seems likely in the coming weeks.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
