EUR/GBP set to break back below the 0.85 level – ING

EUR/GBP has made the break above 0.8500 today after Thursday’s session saw the pound weakening across the board. In the view of economists at ING, the bullish sentiment on sterling has gotten somewhat shakier in the past few days, therefore, EUR/GBP could shift back below 0.85 in the week ahead.

Signs that the bullish sentiment is wobbling

“July’s jobs data on Tuesday may see a tick lower in the unemployment rate as the re-opening has likely led to a rise in job adverts.” 

“Inflation data on Wednesday may see the headline CPI YoY tick lower mostly due to a base effect, in line with our view that we’ll see UK inflation bouncing around this summer. That should not have a long-lived market impact, as the Bank of England is mostly focused on inflation dynamics in 2022.”

“Retail sales may have declined modestly in July as the Delta-variant impact may start to be felt.”

“Overall, it may be too early to see the pound regaining its previous bullish steam, but we would expect at least some stabilisation, and EUR/GBP may well break back below 0.8500 in the week ahead.”