Sterling enjoyed a modest recovery on Friday. Nonetheless, economists at ING expect EUR/GBP to remain stuck in a range while GBP/USD will be drive by Dollar’s movements.

Sunak struggles to make progress

“We doubt Sterling strength owes much to PM Rishi Sunak trying to make progress on revisions to the Northern Ireland protocol. It will probably continue to be monetary policy that drives FX trends. We think BoE rates will peak at 4.25% in March – not that far from market pricing of a peak at 4.35%. 

“Expect EUR/GBP to stay range-bound and GBP/USD to be bounced around by the Dollar trend.”