1.2600-1.2800 looks like a likely near-term – ING

Hot UK inflation data helped diminish the odds of a BoE rate cut in the first half of this year, lifting the Pound Sterling (GBP). Economists at ING analyze GBP outlook.

BoE repricing gives Sterling a lift

Investors took about 20 bps out of the 2024 Bank of England easing cycle on Wednesday. That move supported Sterling across the board. 

It looks like we will probably have to cut our EUR/GBP forecasts soon. Our current forecasts of a move up to 0.8800 later this quarter and 0.9000 later this year look too aggressive.

The inflation data also helped GBP/USD hold support at 1.2600 on Wednesday and 1.2600-1.2800 looks like a likely near-term range until the broader Dollar trend resolves itself.