Friday's price action – particularly in GBP/USD – had all the hallmarks of a short squeeze, ING's FX analyst Chris Turner notes.

GBP/USD to be trading 1.19/20 later this year

"Short GBP/USD had been the conviction call for many at the start of the year given the UK's fiscal travails, but lower bond yields have taken the pressure off UK asset markets. And the (probably misplaced) prospect of a softer US tariff regime has now softened the dollar as well."

"However, for UK corporates short the dollar, we see GBP/USD in the 1.25/26 area as an interesting area to consider USD hedge ratios. We think there is a good case for GBP/USD to be trading 1.19/20 later this year as the Bank of England picks up the pace of its easing cycle and the chancellor may have to come back to the table with more fiscal tightening later this year."

"In terms of the UK calendar this week, Wednesday could be the most interesting. BoE Governor Andrew Bailey testifies to the Treasury Select Committee on Financial Stability. On the same day, UK Chancellor Rachel Reeves tries to shift the narrative back to the growth agenda in a speech at Oxford."