Yesterday’s delayed autumn statement from UK chancellor Jeremy Hunt was backloaded with high-level stealth taxes yet “low of wealth-creation, piling more pressure on the UK’s 5.5 million small businesses, their employees and customers”.
That’s according to Martin McTague, chair of the Federation of Small Businesses.
UK 10-year gilts fell as a result of Hunt's statement, with buyers demanding higher yields going forward.
Cable immediately dipped to an intraday low of US$1.176, but the pound quickly recovered and at the time of writing, is changing hands at US$1.19.
Sterling adjusts to stealth tax-heavy autumn statement – Source: livecharts.co.uk
Some of Sterling’s gains were to do with the relative weakness of the greenback, which has dropped 0.15% on the US Dollar Index to 106.120 in this morning’s Asia trading window.
The pound gained against the euro, with the EUR/GBP pair dropping 0.3% to 87.09p this morning.
On today’s economic calender, UK retail sales decreased 6.1% year-on-year, marking the sixth consecutive month of falls as consumer demand declines in response to inflation.
European Central Bank president has a speech scheduled at 9.30am. Hawkish comments could bait the euro bulls and create upside potential against the US dollar.
EUR/USD has already made gains in today’s Asia session after recovering from yesterday’s intraday lows of US$1.030.
The pair added around 20 pips, bring the pair’s exchange price to US1.037.