ING expects reduction in euro / pound

While the nature of the Bank of England report on inflation was fairly mild, becoming a new negative sign for the bulls on the pound, currency strategists ING noted that recent events did not cause for pessimism about the prospects for the British currency. Several market participants have adjusted their expectations regarding the rates after the unexpected decision to increase the central bank of quantitative easing, but the bank's strategists believed that the Bank of England is still to start raising rates at six - nine months ahead of the ECB, and may begin to tighten monetary policy is already in the second quarter of next year. In light of the above and taking into account the increased emission of British securities, favorable to the pound in terms of increased appetite for risk, ING sees the potential for further growth of the British currency in the pair with the euro. The bank had forecast at the end of the quarter at stg0.83 and at the end of next stg0.80.