GBP little changed but undertone is soft – Scotiabank

Pound Sterling (GBP) is little changed on the session, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets mull budget risks

“There were no UK data reports today and local markets remain more focused on the possible policy choices that Chancellor Reeves will make in the upcoming budget to stabilize government finances. The latest speculation is that Reeves will boost income taxes by 2p, a decision that could weigh on the GBP, given the growth-negative implications.”

“Sterling retains a soft undertone on the charts but has found support at 1.3140—the low seen in May and again in August (and retracement support of the pound’s YTD gains). This is crucial support now, with a break below 1.3140 targeting a drop back to the mid-1.29 area. Resistance is 1.3245.”