GBP/USD to sink back to 1.1350 and remain offered this month – ING

GBP/USD dribbles above 1.1400. Economists at ING expect the pair to move back lower towards 1.1350.

Sterling to remain vulnerable

“Normally loose fiscal and tight monetary policy would be good for the pound. However, it seems that foreign investors are concerned as to how government support will be financed – with the fear that this will largely come through an additional supply of UK Gilts.”

“A difficult external environment and concerns as to how a government spending spree will be financed leave sterling vulnerable.”

“Cable can easily sink back to 1.1350 and should remain offered this month, while the former resistance level of 0.8720 should now prove support to EUR/GBP as it edges up to 0.8800.”