IT WAS easy yesterday to focus only on what was happening to sterling but there was activity in plenty of other currency pairs too. The Australian dollar-New Zealand dollar has retraced ever since the Aussie dollar failed to maintain momentum above NZ$1.3000. The latest retracement to the NZ$1.2400 level equals the 38.2 per cent Fibonacci retracement of the move from the October 2008 low to April 2010 high. It could prove to be a buying opportunity. Capital Spreads quotes NZ$1.2400-NZ$1.2412.

But for those of you concentrating on the Budget, the initial market reaction to Osborne’s speech appears to have been broadly positive for sterling. Sterling-yen should find support at the trendline at ¥133. CMC Markets is quoting ¥134.01-¥134.09.

Recent years have seen the relentless rise in alcohol duty become a prominent feature in fiscal policy. While the drinks companies weren’t specifically targeted in yesterday’s Budget, the rise in VAT will inevitably have an impact on consumer behaviour. The drinks companies, such as Diageo, will be breathing a sigh of relief, since the rise in VAT will not take effect until January 2011. By this time, the Christmas boozing will be over and the New Year’s resolutions will have kicked in. Cantor Index offers a September spread on Diageo of 1,086.10p-1,093.80p.

Since recovering from its recent lows the FTSE 100 has struggled to break the 5265 level with any conviction and it may well struggle to climb past 5,300 in the short-term. Spread Co offers 5,244-5,245.

Jessica Mead