GBP/USD: Room for further depreciation into the end of the year – ING

GBP/USD dropped below 1.1950 late Monday but reversed its direction early Tuesday. Economists at ING expect the Pound to remain vulnerable into the end of the year.

Bank of England Governor Andre Bailey’s testimony in focus

“A significant shift in Bailey’s policy rhetoric two weeks before the BoE meeting appears unlikely, but the proximity to the meeting also means that markets tend to over-interpret MPC members’ comments. In our opinion, the most likely scenario for the December announcement is a 50 bps increase; markets are currently pricing in 57 bps.”

“Cable has fallen back below 1.2000 as the Dollar regained some ground, and we see room for further depreciation into the end of the year as the greenback finds more support and the Pound suffers from a bleak UK economic outlook.”