Daily Currency Report
Market overview
Markets have much to digest in the coming week with a multitude of key G7 economic events slated for release. The dollar may come under selling pressure if markets detect any signal of an end to the Fed's tightening cycle.
GBP
As predicted, Gordon Brown's 10th budget as Chancellor of the Exchequer contained no surprises and, as a result, the pound was left little changed. Just as in his pre-budget report last December, Mr Brown said that the British economy would grow by 2-2.5 per cent in 2006, and then accelerate to 2.75-3.25 per cent next year.
USD
With traders looking ahead to this week's Federal Reserve meeting, the US dollar looks set to strengthen slightly as markets price in a 25 per cent hike in interest rates.
EUR
The euro continues to hold onto its gains against the dollar triggered by the unexpectedly disappointing US housing data.
JPY
After the BOJ officially scrapped its policy of quantitative monetary easing, investors have been calling for the bank to lift interest rates to 0.25 per cent, or even 0.5 per cent, by year-end.