Economists at ING think UK data releases will keep offering support to the pound. Subsequently, EUR/GBP is set to move below 0.83 in the near-term.

Data to help, political noise to have little impact

“Prime Minister Boris Johnson remains in a quite fragile position after receiving multiple calls to resign, even from within the Coservative party. Still, we think that even in the event of a change in leadership, the downside risks for the pound (which is currently being supported by aggressive Bank of England tightening expectations) should be contained.”

“This week, a slew of important data releases in the UK should provide some extra support to the currency – although mostly in the crosses, as we expect the dollar to stay bid as well.” 

“Tomorrow’s jobs data should keep drawing a quite robust picture, and Wednesday’s inflation report for December should show another marginal acceleration in the headline rate. That should offset the negative impact of weaker retail sales on Friday.”

“We continue to expect EUR/GBP to slip below 0.8300 in the near-term.”