Yesterday’s budget did little to the pound with the main focus still on the ongoing Brexit negotiations and monetary policy.
The OBR revised productivity growth down from 7.5% to 5.7% over the next five years – its biggest ever downgrade. While March’s 2017 GDP estimate was downgraded from 2.0% to 1.5%.
However, analysts had already priced the prospect of weaker growth into the GBP exchange rate prior to the budget.
This morning’s release of 3rd quarter growth figures remained at 0.4% as expected so no major moves are expected on the pound.
EUR
GBP/EUR softened slightly yesterday as downbeat economic forecasts were effectively overlooked by investors who had already assumed that British growth would slow over the next few years.
No data out of the eurozone yesterday with today’s EU service and manufacturing sector forecast both expanding – strengthening EUR early this morning.
USD
GBP/USD hit a fresh three-week high as the dollar continued its losing streak yesterday – following an unexpected decline in US durable goods.
A fairly positive economic outlook from Federal Reserve minutes last night. However, some policymakers were concerned with the subdued inflationary outlook.
Thanksgiving today, so no data or news expected out of the US.