ING Research maintains a bearish bias on GBP into year-end.
"The UK debt market faced a fresh round of turmoil yesterday, with 10-year inflation-linked yields rising by 64bp, signalling how the British bond market remains highly dysfunctional. Those securities were likely at the epicentre of the sell-off as large parts of the holders were pension funds who are running liability-driven investment strategies following the post-Mini Budget market meltdown," ING notes.
"We continue to see downside risks for the pound, as levels around 1.10 do not mirror the fragility of the UK bond market. We expect a decisive break below this level today or in the coming days, and currently target the 1.00-1.05 area for the pair into year-end," ING adds.