Foreign exchange analysts at ING have updated their latest currency forecasts and predictions for the Pound Sterling
Sterling will be influenced by global economic and financial conditions. It notes; “Sterling’s correlation with risk assets has fallen a lot this year – a factor probably helping sterling at the moment.”
The Pound will still tend to be vulnerable if global risk conditions deteriorate.
The principal element behind ING’s Sterling call is that the Bank of England (BoE) interest rates have reached a peak at 4.50%.
Overall, it expects that signs of moderation in inflation and a tighter labour market will allow the BoE to avoid further rate increases.
In this context, it expects a BoE re-pricing and lower yields will undermine the Pound.
It adds; “If we’re right with our BoE call, EUR/GBP should be trading towards 0.88 by the end of June. We suspect that the effects of prior tightening will start to show up, via higher mortgage refinancing costs, in 2H23 and pitch a weak UK activity story.”
EUR/GBP is forecast to strengthen to 0.90 on a 6-12 month view.
Sterling will be influenced by global economic and financial conditions. It notes; “Sterling’s correlation with risk assets has fallen a lot this year – a factor probably helping sterling at the moment.”
The Pound will still tend to be vulnerable if global risk conditions deteriorate.
The principal element behind ING’s Sterling call is that the Bank of England (BoE) interest rates have reached a peak at 4.50%.
Overall, it expects that signs of moderation in inflation and a tighter labour market will allow the BoE to avoid further rate increases.
In this context, it expects a BoE re-pricing and lower yields will undermine the Pound.
It adds; “If we’re right with our BoE call, EUR/GBP should be trading towards 0.88 by the end of June. We suspect that the effects of prior tightening will start to show up, via higher mortgage refinancing costs, in 2H23 and pitch a weak UK activity story.”
EUR/GBP is forecast to strengthen to 0.90 on a 6-12 month view.