The British pound could be set to benefit if Wednesday’s Spring Budget is considered both responsible and stimulatory to the economy, say foreign exchange analysts we follow.
Fiscal events such as the budget are traditionally low-risk events for FX markets, but memories of the Liz Truss-Kwasi Kwarteng ‘mini budget’ are still fresh in investors’ minds, and analysis of financial markets reveals the pound and bond market still hold a slight ‘danger’ premium.
“Some premium has been placed into the curve given some residual concerns about the outcome, but this is relatively small,” says Kamal Sharma, an analyst at Bank of America.
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