GBP/USD has neared the 1.16 level. However, economists at ING believe that the pair is at risk of falling back to 1.1410.

Sterling remains fragile

“The UK Gilt market found little to sink its teeth into yesterday regarding the energy support package. Details were scarce in terms of the size of the package and how it is to be funded. At least some of that funding looks set to go through the Gilt market – meaning that the 10-year Gilt-Bund spread can widen out to the 200 bps area. That’s a sterling negative.”

“Cable risks sinking back to the 1.1410 low.”

“Given the challenges in continental Europe, EUR/GBP may trade close, but not break resistance at 0.8720.”