0.8800 looks to be the risk this week – ING

It is quite a big week for Sterling. Economists at ING analyze GBP outlook.

Some independent weakness emerging

There does appear to be a little independent weakness emerging in Sterling, although the Bank of England’s trade-weighted index is only off around 0.6% over the last few days. Quite a large 1.7% MoM drop in UK house prices (Rightmove) will not have helped Sterling either.

Both the last wage and CPI releases emerge before the 14 December BoE rate meeting. Private sector wage data could be a little sticky on Tuesday, although the BoE has recently been downplaying this. Wednesday’s release of October CPI should meet Prime Minister Rishi Sunak’s goal of sub-5% as the energy tariff adjustment comes through.

0.8800 looks to be the risk for EUR/GBP this week, once resistance at 0.8750 yields.