GBP: Weakness should not be underestimated as Brexit reality sinks in - ING

GBP's weakness should not be underestimated in the current $-selling backdrop, especially with Brexit negotiations begins to sink in, according to the research team at ING.

Key Quotes

“The stagflation warning signs are flashing for the UK economy after this week’s data, while any ‘soft’ Brexit euphoria is slowly beginning to fade as the reality of difficult negotiations begins to sink in. This is now likely to be the theme for GBP markets over the coming months and in this environment, there is little reason to doubt that the pound will continue to underperform in the G10 FX space. While GBP/USD sub-1.30 seems about right, EUR/GBP looks set for a near-term test of the psychologically important 0.90 level. Risks are that we stay above there.”