UK rates softened quite a lot yesterday and for the month so far, two-year sterling swap rates are off around 30bp, ING’s FX strategist Chris Turner notes.

EUR/GBP to correct to the 0.8485/8500 area

“It is unclear whether this is a function of the soft UK GDP data yesterday or more just a conviction that rates will be taken lower around the world and that the UK should be no exception – despite radio silence from the Bank of England.”

“If we are right with our call for a back-up in euro rates today, EUR/GBP could correct to the 0.8485/8500 area.”