GBP/USD looks headed to 1.20 – ING

Having suffered heavily last week, this week looks to be an equally formidable one for sterling. Economists at ING expect GBP/USD to slump toward 1.20 while EUR/GBP is set to hit the 0.86 mark.

Plenty of challenges this week

“1Q22 GDP is released on Thursday which may start to show the slowdown emerging in March, ahead of what could be a negative quarterly reading in 2Q22. The market still prices the Bank Rate at 2.15% by the end of the year – pricing which looks vulnerable. However, we do have a hawkish MPC member, Michael Saunders, speaking today. Tomorrow sees the Queen's speech at the opening of parliament.” 

“Political commentators have been discussing the risk that the UK government will look to push ahead with a legislative agenda that could be more combative on Northern Ireland trade. The current UK trade deal is not that much better than a no-deal – yet UK government threats to tear up the N. Ireland protocol will likely weigh on a vulnerable pound.”

“Cable looks headed to 1.20 and EUR/GBP to 0.86.”