Foreign exchange markets affected by Budget

Sterling has fallen on the foreign exchange markets following the chancellor's 2010 Budget.

Against the dollar, the currency reached a low of $1.49 yesterday (March 24th) at around 18:00 GMT.

It is thought that the non-committal nature of the Budget, which was delivered to the House of Commons yesterday by chancellor Alistair Darling, is largely responsible.

CMC Markets analyst Michael Hewson told Reuters: "The bottom line would appear to be that we're pretty much back where we were before the Budget this morning in terms of the government's plans to deal with the deficit."

Other analysts criticised the Budget for being overly political and failing to tackle the economic problems in the country, particularly the deficit.

The chancellor's downward revision of the UK's gross domestic product (GDP) growth to between three and 3.5 per cent for 2011 is also thought to have exerted downward pressure on the markets.

Click here to see how much you can save with HiFX's Foreign Exchange services

Posted by Chris Barber