The Pound Sterling’s recent strength has partly relied on the ‘no news is good news’ narrative, as quiet calendars allowed markets to look elsewhere for easing bets while happily keeping the Bank of England in the group of relatively hawkish outliers, ING’s FX strategist Francesco Pesole notes.

EUR/GBP to face a bit more downside risk

“We remain somewhat concerned that the pound will soon face a correction as UK figures start to point to more urgency for easing, although this week may just be too early for that.”

“Second-quarter GDP was revised slightly lower to 0.5% quarter-on-quarter this morning, but there isn’t a major UK release until the 15 October jobs figures, with only the partial exception of the Bank of England’s Decision Maker Panel survey.”

“With that in mind, together with the risk of eurozone inflation cementing ECB easing bets, EUR/GBP will likely face a bit more downside risk over the coming days and may well test the 0.8300 support.”