GBP/USD is now back to levels before the UK government’s fiscal event on 23 September. In the view of analysts at ING, cable could retrace to the 1.12 zone.

Government’s fiscal reputation has been tarnished

“The government’s fiscal reputation has been tarnished and news that the chancellor may not after all bring forward his medium-term fiscal statement leaves sterling vulnerable.”

“We suspect that the sterling rebound and the dollar correction may have come far enough and could easily see cable reversing to the 1.1200 area.”