GBPUSD: At risk of rather fast corrections as domestic picture for Sterling remains uncertain at best – ING

GBPUSD catches a fresh bid above 1.1700 on upbeat UK Gross Domestic Product (GDP) data. However, economists at ING still believe that the domestic background remains challenging for Sterling.

Economic slump not as bad as feared, for now

“Second-quarter GDP numbers showed a smaller-than-expected contraction (-0.2% quarter-on-quarter), although that was mainly due to the upward revision in August’s figures. Incidentally, September figures have been heavily affected by the Queen’s funeral bank holiday.Still, our UK economist expects a contraction in every quarter until 2Q23, and a lot of focus will obviously be on the measures announced next week by the Treasury. 

“The domestic picture for Sterling remains uncertain at best, and we think this puts GBPUSD at risk of rather fast corrections should the support of a weaker USD evaporate.”