The UK calendar is very quiet this week, and we expect the pound to move in line with global risk sentiment dynamics, ING’s FX strategist Francesco Pesole notes.

GBP is awaiting the catalyst for the next big move

“Today, Bank of England MPC member Sarah Breeden speaks at an event on supervisory cooperation, so may not touch upon monetary policy. She has been standing on the neutral side of the hawk-dove spectrum and voted in line with the MPC majority at all meetings.”

“EUR/GBP is probably awaiting the catalyst for the next big move: either a break below the 0.8380 lows for the year or a return to the 0.85 area. We have generally seen more arguments for EUR/GBP to ultimately move back higher over the past few months.”

“We admit that the BoE or UK data have not offered strong reasons for a material retightening in EUR:GBP rate spreads, meaning the risks are probably quite balanced for the pair in the near term.”