The Budget delivered by Chancellor Sunak yesterday afternoon saw measures that were largely expected. The OBR has increased its economic growth forecasts and believes that the unemployment rate will not be as bad as previously anticipated with the furlough scheme being extended until September. This helped the Pound find some support although an increase in corporation tax in 2023 seems to have stopped it from making any serious gains.
Yesterday, Eurozone final services PMI data came out better than anticipated at 45.7 compared to 44.7 that was forecast although this was largely shrugged off by the market. This morning, Eurozone retail sales and the unemployment rate will both be released which may cause some short-term volatility.
Federal Reserve Chairman Powell will be speaking later this afternoon – the market will pay close attention to any comments to do with rising US Treasury yields and how this may impact the economic recovery in the US before deciding which way the Dollar will go.