More consolidation likely – ING

The Bank of England’s MPC meeting this Thursday might not prompt a major reassessment of the pace of the easing cycle, ING’s FX analyst Chris Turner notes.

EUR/GBP may be more comfortable in the 0.8650-0.8700 area

“If that’s the case, we doubt EUR/GBP needs to stray too far from the 0.8700 area. Equally, there could be a positive surprise for sterling were the BoE to announce that a lower pace of quantitative tightening – e.g., £75bn per year instead of £100bn – was accompanied by fewer sales of longer-dated Gilts. That could take some pressure off the longer end of the curve and be seen as a positive for UK sovereign risk.”

“We tend to think EUR/GBP would be more comfortable in the 0.8650-0.8700 area this week.”