GBP/USD: Downside risks remain material for the pound – ING

The pound has enjoyed a solid rebound, both against the dollar and the euro. However, economists at ING note that the downside risks remain material for the pound.

Shrugging off the downside risks for now

“Downside risks remain material for the pound, both due to a potential forced dovish re-pricing of BoE rate expectations (currently at 2.20% for year-end) and a resurgence of Brexit-related concerns.”

“Risks may take time to materialise and the pound may retain some good momentum this week, especially against the euro, and EUR/GBP may break below 0.8400.”