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Pound Steady Ahead of pre-Budget Report

Posted:24/11/2008 10:51 by Oliver Scott
GBP consolidated ahead of the U.K. pre-budget report. Cable was influenced by broader dollar movement and traded close to the 1.4900 after rejecting highs of 1.4969 ahead of the European open. The pair traded in to 1.4858, but found demand from U.K. clearers and an Asian reserve manager to keep the pair just ahead of 1.4900. Meanwhile, EUR-GBP traded down to 0.8430 lows, but drifted back in to 0.8450. GBP marked time ahead of today's pre-budget report, which is expected to provide VAT cuts and other tax changes, which will aim to stimulate the economy. A new 45% tax rate for top earners may take effect, which will help to offset some of the new tax cuts. GBP may find some support on the new economic measures, but the deterioration in public finances should continue to act as a drag on prices. Selling in to strength is favoured over the medium term, while short term movement will be dominated by equity market performance. click here to return to the top of the page
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