Anna 
Broker ING has highlighted potential downside risks for the British pound, noting its recent decline from its peak against the euro. The firm attributes this movement in part to the pound’s sensitivity to the performance of U.S. equities.
ING also pointed out a decrease in volatility for the EUR/GBP pair as the market awaits the release of key Consumer Price Index (CPI) figures in the UK next week.
According to ING’s UK economist, there may be a dovish shift in expectations for the Bank of England’s (BoE) monetary policy. The firm maintains a positive outlook on the EUR/GBP pair, suggesting that market participants might increase their bets on a potential interest rate cut by the BoE in June.
The British financial markets have been focused on a recent speech by Catherine Mann, considered the most hawkish member of the BoE’s Monetary Policy Committee (MPC). This event followed comments by Megan Greene, who recently expressed a cautiously optimistic view on inflation, echoing sentiments from BoE Governor Andrew Bailey at the last meeting.
ING’s analysis comes as investors and analysts closely monitor the central bank’s actions, which could significantly impact currency valuations. The anticipation of the UK CPI data and the BoE’s potential response are critical factors in ING’s assessment of the pound’s trajectory.
