Economists at ING expect economic data to help build a floor around the 0.8700 level in EUR/GBP.
Risk of GBP underperformance as the UK economic outlook deteriorates
We keep pointing to the fact that pricing in the Sonia curve appears a bit too conservative compared to that of the US and the Eurozone in pricing monetary easing and that raises the risk of GBP underperformance as the UK economic outlook deteriorates.
The combination of a tentative improvement in Eurozone data and soft inflation figures in the UK should help build a floor around 0.8700 in EUR/GBP.