The British Pound was gaining traction during trade on Wednesday as traders appear uncertain of the currency’s direction ahead of the looming budget statement from Philip Hammond, the country’s finance minister. Analysts largely don’t expect his statement will have any major impact on the Pound, however, as FX traders had already prepared themselves for a lower growth forecast. Moreover, many analysts believe that the finance minister doesn’t have the room to make any kind of high impact budget decisions. One area that the consensus agrees on is that he will speak to ways to improve the current weak productivity levels and may implement ways to increase building in the residential homes arena.
As reported at 10:58 am (GMT) in London, the GBP/USD was trading at $1.3252, a gain of 0.03%; the pair earlier hit a session peak of $1.3262 while the low is at $1.3230. The EUR/GBP is trading at 0.8866 Pence, a gain of 0.06%; the pair has ranged from 0.888534 Pence to a peak of 0.88870 Pence.
UK GDP Forecasts Dismal
One currency strategist says that Sterling is still undervalued for the time being, and will react more strongly to good news as a result. Outside of the budget announcement later today, markets will focus on the ongoing Brexit negotiations, and tomorrow’s release of growth data for the third quarter. At present, analysts polled are forecasting no change to GDP (annually and quarterly basis) while total business investment is being forecast to have fallen significantly in Q3, both on an annual and a quarterly basis.