Sterling has been holding its own against the Euro and the Dollar. Economists at ING stick to their EUR/GBP and GBP/USD forecasts for the first quarter at 0.89 and 1.20, respectively.

Bumpy ride

“There is probably substantial short Sterling positioning on the crosses in expectation of the turn in the BoE cycle. This makes for a bumpy ride. But overall we are happy with our end 1Q23 forecast for EUR/GBP at 0.89, which will probably leave Cable trading towards the lower end of a 1.20-1.24 range.”

“Look out for UK January CBI retail sales figures today – likely to confirm a downtrend on the back of weak consumer confidence and squeezed real incomes. Cable to trade well within a 1.2350-1.2450 range.”