08/07 – Sunak steps up

08/07 – Sunak steps up

GBP: Mini-Budget due at 1.30

EUR: Consolidating

USD: Following malaise in equities


Chancellor Rishi Sunak will stand up at 12.30 today and deliver a mini budget, a plan to get the UK going following the induced coma of lockdown. A lot of his more retail policies have leaked – stamp duty, Job creation schemes and money for green energy – but we are confident the Chancellor has more to announce when he takes to the dispatch box.

The impact on sterling is less certain, a run higher through the past couple of days could easily fizzle out if the Chancellor’s language focuses more on debt repayment than spending. Similarly, we could simply be in the middle of a buy-the-rumour-sell-the-fact rally that peters out as the terms of the Chancellor’s plans become clear.

Certainly, sterling rallied yesterday without its typical support from rises in equity markets. How it performs today will show whether that was an aberration or the pound showing a new ability to push higher. In my opinion sterling looks quite toppy around here, especially against the euro.


The euro has continued to lose ground against the pound in the past 24hrs with those looking for a lower single currency hoping that such weakness is the beginning of a new trend. In the short term we expect the pair to consolidate around current levels.

The data calendar is Europe is quiet today.

US Dollar

Equity markets have remained soggy in the past 24hrs, in turn helping the USD to consolidate around these current levels. With the data calendar quiet this week it is no surprise that the prevailing news around the level of Covid-19 infections is front of mind for most investors, limiting their ability to become overly bullish.

As such, we expect the greenback to follow the prevailing mood in stocks today.


The continual increase in local lockdowns in certain states in Australia have taken the AUD lower once again overnight. The declines are obvious but there is also an argument that swift lockdowns are bullish for a currency – if handled appropriately – as they should allow people back to work and spending sooner rather than later. For now, the AUD is in the crosshairs.

Have a great day.

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.