GBP/USD: Cheap, but cheap for a reason - ING

GBP is softer on the back of a disastrous UK election performance by the ruling Conservatives, feels Chris Turner, Research Analyst at ING.

Key Quotes

“While Theresa May’s Hard Brexit has been rejected by the electorate, securing a soft Brexit, or securing any legislation whatsoever  looks very challenging with this very weak government.”

“The fact that GBP has not fallen further largely owes to GBP undervaluation (around 25% versus USD) and one of the key reasons we think Cable will bounce back later this year.”

“Yet the UK economy looks weak (full year growth 1.5%) and we think the 3 external MPC members voting for a hike should be ignored.”