Unlikely to fall much further unless UK data surprises on the strong side – ING

EUR/GBP dived on Friday and is trading close to the 0.8500 lows. Economists at ING analyze the Pound Sterling (GBP) outlook.

Key data tests for the strong Pound

The Pound’s strong momentum is set to face a key challenge on Tuesday as the UK releases its jobs report. Wage growth figures – especially in the private sector – will be watched very closely as they now represent the second most important input for the Bank of England after services inflation. 

Later in the week, we’ll also see the UK’s January GDP report, February’s Retail Sales and the BoE’s inflation attitude survey.

Back in February, EUR/GBP’s exploration of the 0.8500 area was very short-lived and followed by a sharp rebound. Unless UK data surprises on the strong side, we doubt EUR/GBP can fall much further from these levels.