According to Jin10, Morgan Stanley strategists said sterling has “priced in almost all the good news” and warned that investors may be too optimistic about the upcoming budget. They expect the pound to fall to around $1.30 against the dollar by year-end, from near $1.33 currently, and see further depreciation next year. As UK Chancellor John Healey prepares to present the budget on Wednesday, markets broadly expect a cautious fiscal policy, and other strategists have expressed similar caution. Strategists at BBVA and Crédit Agricole also expect the pound to fall to $1.31 against the dollar by year-end and say it could weaken against the euro. Earlier turmoil in French bond markets had pressured the euro.