Daily FX Report – First Labour Budget In 14 Year

GBP: The British Pound is holding steady near key levels against the Euro and Dollar, as investors focus on the potential positives of today’s budget announcement. Chancellor Rachel Reeves is set to introduce notable tax increases (negative for GBP) along with expanded infrastructure spending (positive for GBP). Markets are keen to see which factor will have a stronger influence, as this could shape FX market trends in the coming days.

EUR:Meanwhile, the Euro remained in a narrow range against other currencies yesterday, marking the eighth consecutive day that investors have been cautious about taking positions on the Euro. Upcoming preliminary inflation data from Germany, six of its states, and Spain will provide insight into whether inflationary pressures are staying within the European Central Bank’s 2% target.

USD: The U.S. Dollar held firm at higher levels yesterday ahead of several significant economic reports due this week. U.S. gross domestic product data is expected later today, though primary attention will be on September’s core personal consumption expenditures (PCE) price index— the Federal Reserve’s preferred inflation measure—coming Thursday, with the monthly jobs report following on Friday.