Sterling suffers thanks to less than positive reaction to the 2016 Budget

The British currency continued to fall across the board for most of yesterday, as uncertainty over all things sterling-related came back to the fore.

The morning had started off well, with the release of earnings data showing growth of 2.1%, exceeding the forecast level of 2.0%, and unemployment remaining steady at 5.1%. However this support did not last, and sterling soon found itself heading to two-week lows against both the US dollar and euro as Chancellor George Osborne revealed in the Budget that the UK 2016 economic growth forecast has been downgraded to 2.0% [previously 2.4%]. UK productivity was also revised lower, giving sterling no platform to recover throughout the afternoon.

Late in the day, sterling did, however, receive a boost against the US dollar as the Federal Reserve confirmed, what most commentators had already forecast, that there was likely to be only two US interest rate rises this year rather than four.

Today we will hear from the Bank of England (BoE) as they announce their latest decision on interest rates. They are not expected to change, but as we have become used to, the accompanying minutes from the meeting will provide insight into the direction of future monetary policy, and any concerns over a potential Brexit, which is likely to influence the pounds movements.

If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.