Sterling continues to defy some of the more bearish forecasts. Economists at ING expect the GBP/USD pair to edge higher towards 1.24 amid some respite in equities.

Equity rally could help sterling

“Headlines could be grabbed this afternoon by news that Conservatives in the lower house have backed a bill suspending parts of the Northern Ireland protocol and risking a trade war with the EU. We suspect that news is priced in, even though it will not be welcome for sterling.”

“Helping sterling should be the better equity environment where sterling has recently taken on the characteristics of a growth currency with a decent correlation with equities.”

“In quiet markets, GBP/USD could edge up to the recent highs at 1.2400, while EUR/GBP could edge back down to the 0.8550 area.”