GBP/USD could set new lows, move below 1.13 on the cards – ING

The FOMC and incoming news on domestic policy proposals mean that the pound may remain volatile today. The GBP/USD pair could dip below 1.13, economists at ING note.

UK policy plans remain in focus for GBP

“In line with our view for a positive response by the dollar to the Fed announcement, we think cable could set new lows today (a move below 1.1300 possible), and the pound’s higher sensitivity to a potentially adverse reaction in equities compared to the euro suggests some upside risk for EUR/GBP (which could re-approach 0.8800).”

“Prime Minister Liz Truss’s policy plans remain very much in focus too, and recent reports that her government may push for tax cuts – including the stamp duty on home purchases – may ease some concerns about the clouded UK economic outlook, but also fuel doubts about the sustainability of expansionary fiscal policy while delivering a mammoth energy bill support package.”

See – Fed Preview: Forecasts from 16 major banks, fast pace hiking cycle continues