GBP/AUD is 0.11 pct higher at 1.4538.
GBP/CAD is 0.26 pct higher at 1.5450.
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16:17: Shock and awe to boost GBP on Wednesday?
Wednesday is Budget day and RBS analyst Paul Robson says it could be a sterling-shaker:
"The greater the shock and awe of these policies, the more likely it is that GBP reacts positively. Reports that Treasury advisers and officials have been in North America in recent weeks, most noticeably in Canada and that incoming governor Carney is said to want to hit the road running, suggest that the risks of a surprise are greater than usual.
"However, in general, we believe that markets will be underwhelmed as the government’s weak political mandate potentially limits the room for change."
14:40: GBP strength vs EUR prevails, but don't think this is the beginning of a GBP rally
Camilla Sutton at Scotiabank says today's moves by GBP should not be misconstrued as the start of a fresh GBP rally:
"We do not expect that this is the beginning of a significant GBP rally."
"We hold a month end target of 1.51, but are more bearish into year‐ end, expecting GBP to close at 1.45."
"This is an important week for GBP from both a rating agency and a central bank policy perspective.
"On Tuesday, the BoE will release the minutes of its March policy meeting, where the voting pattern for asset purchases expansion will prove most important for markets.
"However, the reaction might be muted as on Wednesday, the UK’s budget will be released, which is expected to highlight that the government’s growth outlook is vulnerable and that it is likely to take longer to have the country’s debt ratios fall, key inputs for the rating agencies."
10:05: How best to express euro weakness?
Athanasios Vamvakidis at Bank of America Merrill Lynch Global Research says:
"Estimates from an econometric model suggest that the Euro is exactly where it should be at this point, but also points to downside risks. Consistent with our recent trade recommendation, we like expressing this view by selling EURAUD. Analysis of the relative monetary policy stance and comparisons with market expectations for policy rate changes also support this trade."
9:55: US dollar to dominate this week
Greg Gibbs at RBS:
"Overall we continue to see the USD strength over the last month or so retained, in particular we see downside potential for EUR and GBP returning this week."
For sterling Gibbs says: "The key events are release of BoE minutes followed an hour later by the UK Chancellor of the Exchequer Osborne's 2013 budget presentation to parliament, both on Wednesday."
8:30: GBP gains against EUR; but flat elsewhere
The pound sterling (Currency:GBP) is powering ahead against the euro this morning amidst broad-based Euro weakness.
The pound to euro exchange rate is 0.95 pct higher at 1.1670.
The pound to US dollar exchange rate is 0.07 pct lower at 1.5103.
The pound to Australian dollar exchange rate is 0.3 pct higher at 1.4564.
8:20: Euro weakness is the theme across currency markets today
Lloyds Bank say:
"The EU have scored a spectacular own goal this weekend in bailing in depositors in Cypriot banks. This massively increases the risks involved in any bailout in the future, as the fear of a depositor levy elsewhere seems sure to trigger capital flight if any bailout is threatened or applied for. While the motivation for the Cyprus decision seems related to a desire to punish money laundering, the subtleties will be lost on depositors elsewhere who anticipate a need for a bailout."