GBP/USD to see a decisive break below the 1.10 level – ING

FXStreet Insights Team FXStreet

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

“The BoE delivered another pre-market attempt to calm investors, by announcing it will widen the scope of daily gilt purchase operations, including inflation-linked bonds.”

“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.”

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