GBPUSD is staging a downward correction. Economists at ING expect Cable to move back lower to 1.10 over the coming months.

1.1670/1.1750 could be the short-term corrective low for GBPUSD

“The UK Chancellor, Jeremy Hunt, has been ramping up the rhetoric that Thursday's autumn statement is going to hurt – comprising tax rises for all and a large cut in government spending. None of the choices are politically palatable, but failure to deliver would trigger another round of Gilt and Sterling sales.” 

“1.1670/1.1750 could be the short-term corrective low for GBPUSD before a possible push to 1.20 on a further short-squeeze (short GBP had been a conviction call amongst fund managers). But in the bigger picture, even these current GBPUSD levels near 1.18 should prove attractive for those with GBP receivables.”

“We suspect that Cable may trade back to 1.10 over coming months.”