The answer depends on where the widely expected cuts actually appear. If the UK is left as a less 'investible' territory because, for example, corporation tax has been increased and/or corporate tax breaks have been abolished then GBP will fall against USD and probably also against EUR (although to a lesser extent). If the cuts focus on less business critical areas such as the welfare system then this could be viewed positively for GBP.
The likelihood is that the announcements will be to vague to make a clear decision tomorrow and whilst there will be some volatility the real direction may not be felt until the implications have been fully understood or even fully detailed, which may not be until September.
On balance there seems to be more risk for GBP then potential so perhaps those wishing to buy GBP will have good opportunities over the coming few days.
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Posted in Daily Market News on May 30 2014