MICHAEL HEWSON | CMC MARKETS
If the Chancellor was looking to see if his credibility budget was a success, then judging by the market reaction so far it could well be he has succeeded. Euro-sterling has gained ground, pushing below the 83.2-3p support area and while the bigger 84p resistance level holds, further sterling gains remain likely in the near term. Against the US dollar, $1.468 remains the key barrier to further declines towards $1.45.
NICK BEECROFT | SAXO BANK
Most scenarios seem bleak for the pound: in a calm world, low rates would make sterling a carry trade funding currency. Alternatively, a blow-up of the Eurozone debt crisis will send investors scurrying into safe-havens, principally the dollar and swiss francs. So whilst the pound may hold its own against the euro, it could be a different matter versus the dollar.
DUNCAN HIGGINS | CAXTON FX
It is likely to take at least a day or so before the market can fully analyse the potential economic impact of the policies outlined. Immediate reaction has been positive for sterling with the pound comfortably back above €1.20 and erasing its early losses against the dollar. On the surface, the market has taken an optimistic view of the Chancellor’s efforts to address the deficit.
IAN STANNARD | BNP PARIBAS
The UK budget appears to be tough enough to keep the rating agencies at bay. Sterling-dollar is holding up well so far with the key support at $1.4650 remaining unchallenged despite the breach of up trendline support. We continue to favour selling sterling-dollar rebounds, especially given the proximity of major down trendline resistance currently intervening at $1.4920.