ING Bank: The British pound may face strong downward pressures.

Chris Turner, a foreign exchange market analyst at ING Bank, shared his expectations regarding the performance of the British pound by the end of this year, suggesting that the rise of the euro may reinforce the decline of the pound – specifically, the increase in the euro-pound pair – due to market mispricing of the monetary policy path in Britain.

In this regard, Turner added that although market expectations regarding British policy are more pessimistic, the European Central Bank's interest rate cut cycle has taken a stronger curve, as the ECB has proven to be more aggressive in cutting rates than anticipated.

This week, the markets are awaiting four speeches by Bank of England Governor Andrew Bailey; if Bailey supports the idea that the Bank of England could become more aggressive in continuing the interest rate cut cycle, it is likely that the pound will face strong pressure in foreign exchange trades.

This impact may seem stronger against the dollar – meaning a decline in the pound-dollar pair – more than against the euro, as the 1.30 level appears weak for the pound-dollar pair.

Finally, the British Purchasing Managers' Index (PMI) data scheduled for release on Thursday should hold significant importance regarding whether the pound will continue to outperform or perhaps succumb to some of the Bank of England's pessimistic comments.