Pound Falls Ahead Of U.K. Autumn Budget Statement

(RTTNews) - The British pound weakened against other major currencies in the European session on Wednesday, as traders await the U.K. budget declaration, where the Labour administration is anticipated to increase taxes and expenditure.

The United Kingdom's (U.K.) Autumn Forecast Statement is set to be released at 8.30 am ET. Chancellor of the Exchequer Rachel Reeves is anticipated to announce a tax increase on various income-generating sources and provide increased spending plans to encourage investment in what will be Labour's first budget presentation in more than 15 years.

Investors also expect the Bank of England (BoE) to cut interest rates by 25 basis points (bps) in its upcoming policy meeting on November 7.

European stocks traded lower as investors assessed a batch of mixed earnings and awaited regional growth data as well as the U.K. government's budget for direction.

In the European trading now, the pound fell to nearly a 2-week low of 0.8354 against the euro, from an early high of 0.8314. The pound may test support around the 0.84 area.

Moving away from an early 9-day high of 1.3027 against the U.S. dollar, the pound dropped to 1.2695. The next possible downside target for the pound is seen around the 1.28 region.

Against the Swiss franc and the yen, the pound edged down to 1.1243 and 198.27 from early highs of 1.1291 and 199.58, respectively. If the pound extends its downtrend, it is likely to find support around 1.11 against the franc and 194.00 against the yen.

Looking ahead, U.S. MBA weekly mortgage approvals data, U.S. GDP data for the third quarter, U.S. core price index for the third quarter, pending home sales data for September and U.S. EIA crude oil data are slated for release in the New York session.