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    Scotiabank’s strategists say the Pound Sterling is stable but has a weak undertone.

    by VT Markets
    /
    Oct 30, 2025
    The Pound Sterling (GBP) is mostly stable but shows signs of weakness, according to Scotiabank’s Chief FX Strategists. The market is closely watching Chancellor Reeves as he prepares for the upcoming budget, which may affect GBP stability. There are rumors that income taxes could increase by 2p. This might hurt economic growth and put more pressure on GBP. Currently, GBP has support at 1.3140, a key level that appeared in May and August. If it drops below this, it may fall to the mid-1.29 range. The resistance level is at 1.3245.

    Market Observations and Insights

    The FXStreet Insights Team shares insights from various market experts to help clarify market trends and predictions. Right now, the pound is holding steady, but the sentiment is weak. Everyone is awaiting Chancellor Reeves’s upcoming budget, which is creating uncertainty. This event is crucial for preparing trading strategies in the weeks ahead. The rumor of a 2p income tax hike worries many about the pound’s value. Recent GDP figures for the third quarter of 2025 showed a mere 0.1% growth, raising concerns about a slowing economy. A tax increase could further reduce consumer spending, similar to the challenges faced during the early 2020s.

    Strategic Trading Approach

    In this context, we recommend buying put options on GBP/USD. This strategy allows for downside exposure if the pound weakens after the budget announcement, offering a controlled risk alternative to shorting the currency directly. We are focusing on 1.3140, a support level that held steady in May and August. If GBP breaks below this level, it indicates a potential downward trend. Our target in this case would be the mid-1.29 range, providing a clear aim for these bearish trades. For those unsure about the direction but expecting volatility, we suggest looking at options that benefit from price spikes. The budget could create significant price movements, and if GBP breaks above the resistance at 1.3245, a sharp rally could occur. Being ready for a major move in either direction is wise. Create your live VT Markets account and start trading now.

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