- GBP/USD was seen digesting the early volatility triggered by the BoE’s emergency rate cut.
- The UK budge proposals failed to impress the GBP bulls or provide any meaningful impetus.
The GBP/USD pair managed to hold its neck above the 1.2900 round-figure mark, albeit lacked any strong follow-through and remained below session tops post-UK budget announcement.
As investors looked past the Bank of England’s surprise move to cut interest rates by 50 bps points, the pair consolidated the intraday volatile swings. Bulls seemed rather unimpressed by the UK budget proposal to increase the level of spending on public infrastructure.
Adding to this, the UK Chancellor of the Exchequer Rishi Sunak unveiled massive coronavirus fiscal measures, which included providing temporary loans to businesses and 80% guarantee of bank loans of up to 1.2m to small businesses.
The budget proposals were exactly the kind of anticipated targeted stuff that would help businesses to survive the coronavirus outbreak. The British pound did get a minor boost but struggled to gain any meaningful traction and held steady near the 1.2920-30 region.
Conversely, the US dollar maintained its heavily offered tone and failed to gain any respite from slightly higher-than-expected US consumer inflation figures. A weaker greenback seemed to be the only factor lending some support at least for the time being.
Technical levels to watch
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