Published by Mark Smith-HalvorsenThe euro slumped to an 18-month low against the pound in trading yesterday (June 8th) after prime minister David Cameron made his toughest statement yet on budget cuts.Following earlier statements from deputy PM Nick Clegg assuaging fears of a return to Thatcherite economics, Mr Cameron stated that the cuts will affect every Briton's life.However, both party leaders stressed the commitment to 'progressive' cuts following the debt reduction model pursued by Canada in the 1990s, when the national deficit was reduced by 20 per cent.But as the Institute of Economic Affairs (IEA) has pointed out, if the same 20 per cent target is pursued by the UK government, cuts would be in the region of £140 billion, twice that witnessed in Canada.Speaking to the Telegraph, Mark Littlewood, director general of the IEA, commented: "This is vastly more ambitious and encouraging than anything promised in the Conservative manifesto."Forex brokers were sold on the programme yesterday, while fresh concerns about the euro also weighed on the single currency.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site