GBP/USD briefly dropped below the 1.20 level earlier this week. Economists at Rabobank expect the pair to see further dips below 1.20 in the coming months.

EUR/GBP seen at 0.90 around the middle of the year 

“We expect to see further dips below GBP/USD 1.20 in the coming months.”

“While EUR/GBP has dropped back from its recent highs, it remains in an ascending channel, and we retain our forecast for a move to 0.90 around the middle of the year.”

“On March 15, Chancellor Hunt is due to present his spring budget. Hunt has provided reassurances to the market that he will not be pulling any rabbits from the hat next month, given the need to reduce inflation. This may avoid any crisis for the gilt market, but it suggests the potential for little change in the prevailing economic gloom. This is likely to leave GBP on the back foot.”