Nomura closes trade recommendation to buy euros for sterling

Nomura said on Wednesday it had closed its recommendation to buy the euro against sterling after Britain's budget "avoided the major tail risks that could have hurt" the pound.

They said in the budget "the overall fiscal 'headroom'” was increased, and there was no sign of near-term tightening that would have weighed more heavily on growth and added to Bank of England rate cut expectations."

As a result, Nomura anticipate some short sterling positions -- bets the currency will fall -- that had been popular going into the budget will be removed, which would help the pound rise against the euro.

The euro dropped as low as 87.55 pence on Wednesday, its lowest in nearly a month. EURGBP=