EUR/GBP holding in bullish territory on Brexit woes

• EUR/GBP holds the 0.85 handle in Asia on Brexit woes.
• UK data is in the spotlight this week ahad of BoE.

EUR/GBP is currently trading at 0.8501 and is consolidating the rally from the 0.8350s which occurred as the UK election bid continues to unwind. GBP saw sustained underperformance as Brexit woes resurface and was the underperformer. The pound was extending yesterday’s losses to as low as 1.3100 vs the US dollar following UK PM Boris Johnson's confirmation to parliament that the government planned legislation to ensure that the UK’s post-Brexit transition period would conclude in Dec 2020. This is now leaving only 11 months for trade negotiations with the EU.

Looking ahead

Looking ahead, we have ECB President Lagarde speaking in Frankfurt. "The Dec IFO survey of Germany business sentiment is anticipated to show minor improvement. The headline climate index is seen at 95.5 from 95.0 in Nov, with expectations 93, current assessment still stronger at 98," analysts at Westpac explained. 

And following two day's of UK data, which has been mixed, with PMIs in contraction vs a slightly better looking jobs market, the UK Nov Consumer Price index will be worth noting ahead of the Bank of England policy decision Thursday. "Consensus is 1.4% year overall, 1.7% year core, versus the 2% target which was exceeded in 2017-2018," analysts at Westpac said. 

EUR/GBP levels