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GBP/USD Falls Below $1.30 on Eve of UK Budget

By Yasin Ebrahim

Investing.com – The pound slumped against the dollar on the eve of the U.K. budget revelation despite expectations the country is set to deliver a big stimulus package and measures to help combat the Covid-19 outbreak.

"As part of the budget, as well as providing net stimulus for the economy and more support for the National Health Service, I hope the Chancellor will announce measures to ensure economic damage from this crisis doesn't become more permanent," Royal London Asset Management senior economist Melanie Baker said.

GBP/USD fell 1.59% to $1.29.

The dollar, meanwhile, was also boosted by a rebound in Treasury yields from a plunge to record lows a day earlier. Still, some on Wall Street warned the bottom was not in yet for Treasury yields.

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"We're likely to see further declines in Treasury yields. We think the federal funds rate gets cut to 0%. I think it's a long-time before we see rates go back up," said Kathy Jones, chief fixed income strategist at Charles Schwab (NYSE:SCHW).

The U.K. government confirmed its first budget announcement will take place on March 11, starting at around 12:30pm GMT (08:30 ET).

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