EUR/GBP to move within a 0.8450-0.8550 range for the time being – ING

EUR/GBP is displaying a lackluster performance in the early European session. Economists at ING expect the pair to continue trading in a 0.8450-0.8550 range for now.

Sterling bears queuing up

“There remains a lot of bearishness surrounding sterling. The argument goes that hiking rates in a softening economy is a sterling negative. And true, sterling has recently taken on the characteristics of a growth currency, being driven more by equities than rate differentials over recent months.”

“We are slightly negative on sterling – looking for EUR/GBP at 0.8600. But we think a lot of the weakness is a reflection of broad dollar strength and we are not looking for a sterling collapse.”

“EUR/GBP will probably continue trading in a 0.8450-0.8550 range for the time being – i.e. an environment of greater volatility but within defined ranges.”