After a disappointing few days in the wake of the Greek crisis, this morning the FTSE 100 woke up in a more optimistic mood, rising 0.52 per cent in early trading in anticipation of encouraging announcements from George Osborne during today's summer Budget.
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Sterling was 0.23 per cent lower against the dollar, at $1.5427, although that was up from $1.5406 earlier.
"The FTSE could have a rare moment in the spotlight this afternoon," said Connor Campbel, a financial analyst at Spreadex. However, he warned that fears over Greece and "yet another calamitous fall" in the Chinese stock market could continue to weigh on investors' minds.
"Gild, silver, copper and Brent Crude [are] all in line for another day of hefty losses. The drag this causes on the FTSE's commodity stocks is obvious, so the UK index will be up against it if it wants to climb to some gains," he said.
Poor manufacturing data announced yesterday could serve as a drag on the pound.
And with further changes to pensions likely to be announced, as well as the slim chance of a let-up in the much-maligned bank levy and further measures to ease pressure on the housing market, markets are likely to spend much of the morning on edge.