The pound has reversed back to pre 'fiscal event' levels on news of a policy U-turn. Economists at ING expect GBP/USD to settle in a 1.1000-1.1350 range.

EUR/GBP may find support under 0.8700

“Liz Truss's government will formally reverse its planned abolishment of the 45% income tax bracket. We feel this move is rather symbolic, being less about the amount of money it will save (low billions) and more about the poor signal it had delivered of ideological (unfunded) tax cuts.” 

“Cable has returned to levels seen just before Chancellor Kwasi Kwarteng delivered the infamous 'fiscal event' and it would now be hard to argue that cable should be trading much higher than that. But this does alleviate the risk of cable trading to parity in that it shows Downing Street will show greater respect to financial markets when considering policy options.”

“Maybe we see a new cable trading range of something like 1.1000-1.1350.”

“EUR/GBP may find support under 0.8700 now.”