There is still a chance of one final hike at the 2 November BoE meeting. This means that the market pricing of around a 50% chance of one last hike may largely stay with us until that meeting.

Pricing of the BoE curve has been a big driver of Sterling this year and we suspect EUR/GBP can now drift in a 0.86-0.87 range into that meeting. A leg higher to 0.88/89 probably requires some news of a serious UK slowdown and the market moving on to pricing the 2024 easing cycle.

GBP/USD is another matter, however. If EUR/USD trades down to 1.05, GBP/USD could be trading near 1.21.