More turmoil in the UK bond market has seen the Bank of England (BoE) step in with another emergency measure, this time to support battered inflation-linked bonds. However, economists at ING expect the GBP/USD pair to slip under the 1.10 mark.
GBP/USD looks too strong at 1.10 considering the fragility of the bond market
“We continue to see downside risks for the pound, as levels around 1.10 do not mirror the fragility of the UK bond market.”
“We expect a decisive break below the 1.10 level today or in the coming days, and currently target the 1.00-1.05 area for the pair into year-end.”