GBP/USD currency pair closed the third straight trading day in positive territory on Tuesday and touched its highest level since early September at 1.2560. The pair went into a consolidation phase and erased a small portion of the weekly gains on Wednesday but managed to hold above 1.2500.
British Finance Minister Jeremy Hunt will deliver the autumn budget statement later in the session. Hunt is expected to unveil significant tax cuts to businesses to promote economic growth, raise the National Living Wage and lift earnings of low-paid workers by about 10%.
It’s difficult to assess the impact of these measures on inflation and inflation expectations but the Bank of England (BoE) officials’ latest comments suggest that they remain cautious about dismissing additional tightening in the future.
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In the second half of the day, the US economic docket will feature Durable Goods Orders data for October and the weekly Initial Jobless Claims.
In case the number of first-time applications for unemployment benefits continues to rise, the US Dollar (USD) could have a difficult time finding demand.
Investors will also pay close attention to the action on Wall Street ahead of the Thanksgiving Day holiday. In case risk flows dominate the action after the opening bell, the USD could weaken against rivals.