How to trade GBP around the UK Budget

Whilst a supportive Budget could boost GBP, a heavy focus on tax raises and spending cuts could drag GBPUSD lower towards 1.3750



GBP/USD trades cautiously ahead of the 2021 Spring Budget.

Chancellor Rishi Sunak is under pressure from all angles not to rise taxes or cut spending too quickly  for fear of strangling the economic recovery.

An extension of the furlough scheme, support to the high street and a boost to home buyers would all be considered Pound supportive.

However, a rise in corporation tax or a freeze of the income tax threshold would be considered Pound negative.

Should Rishi focus too heavily on tax rises the Pound could head sharply lower towards 1.3820 and even 1.3750. 

However a very supportive Budget could send the Pound back towards 1.40 and target 1.42 near the multi year high.

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