A poor Tuesday for sterling saw it fall to fresh five-year lows against the US dollar as fears over political uncertainty stemming from the upcoming general election weighed on the currency. Economic sentiment data from Germany was largely ignored in the morning, as sterling fell against the euro for a second successive day. Sterling struggled to find support throughout the day, with little economic news released from elsewhere, and investors positioning themselves in advance of today’s interest rate decision from the Federal Reserve.
A major day also lies ahead for sterling, with George Osborne presenting the annual Budget. This will take on additional importance due to the upcoming UK general election. In addition to this, we will see significant data released for the UK in the form of the average earnings index and the claimant count change which provide key insights into the current UK labour market. Finally minutes from the latest Bank of England interest rate decision will be studied by investors looking for any insight into future monetary policy.