Pound Stays Tied Up in Range Ahead of UK Budget

The British pound is trading in a narrow range against the US dollar as investors await the UK government's Budget announcement, according to Scotiabank's FX strategy team.

The market context shows that GBP/USD has remained within a well-defined trading band, reflecting market caution ahead of the UK Budget. This consolidation is due to opposing forces: expectations of fiscal stimulus or spending measures in the Budget could support the currency; on the other hand, concerns about the UK's fiscal deficit and potential tax increases could weigh on sentiment.

The technical outlook suggests that GBP/USD will likely remain range-bound until the Budget details are released, which could trigger a breakout. Key levels to watch include the upper boundary of the range as resistance and the lower boundary as support.