The Pound Sterling (GBP) is little changed while Gilts are a little softer in line with the broader tone in fixed income as UK markets are brace for tomorrow’s budget announcement, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP little changed in tight range near 1.2975

“More spending (investment in health services, for example) and more debt issuance is expected after Chancellor Reeves announced changes in the way the government measures indebtedness to give it more room to manoeuver and achieve its policy goals.”

“GBP’s late week rebound has not developed any further upside momentum so far this week. In fact, spot has tended to stick very close to the 100-day MA (1.2974) over the past couple of sessions after rebounding to that point last Thursday.”

“Price action still holds some promise of improvement though and gains through 1.2995/00 could still see the pound extend to the 1.3070/75 area. Support is 1.2910.”