GBP/USD drops to the 1.17 region. Economists at HSBC expect cable to suffer further falls.

UK recession to leave the pound vulnerable

“The vagaries of risk appetite, two-year rate expectations and commodity prices point mostly to GBP downside.”

“Our forecasts (and the BoE’s) suggest a UK recession, probably leaving the GBP vulnerable.”

“Politics may get more traction in the FX market amid the 5 September result of the Conservative party leadership election. We expect meaningful loosening from the incoming UK Prime Minister. But such fiscal largesse may merely remind the GBP of the structural issues plaguing the economy in the form of its large twin deficits.”