GBP/USD to test the 1.2350 level next week – ING
|GBP/USD is trading just below the 1.25 psychological mark, nearly unchanged for the day. Economists at ING expect the cable to break down to 1.2350 next week.
Seven BoE hikes priced by year-end
“The fact that sterling money markets still price a further 175 bp of Bank of England (BoE) tightening by year-end goes to show that investors struggle to buy into the idea of a pause anywhere.”
GBP/USD one-month volatility is trading at 9.4% – not too far away from one-month realised volatility – and we could easily see traded volatility rising back to 11-12% levels given huge uncertainty over coming weeks.”
“Right now we would favour the dollar over sterling and could see GBP/USD breaking down to 1.2350 next week.”
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