EUR/GBP to dip below 0.86 on a hawkish message from BoE's Bailey – ING

The pound continues to be rather unreactive to Brexit-related news. Bank of England’s Governor Andrew Bailey will speak on Wednesday and a hawkish message could drag the EUR/GBP pair under 0.86, economists at ING report.

Still no impact from Brexit headlines

“The UK Government proposed bill to unilaterally scrap part of the Norther Ireland protocol yesterday, which will now need to be voted by the House. There are surely many indications that the pound is largely pricing in this scenario, and markets remain mostly focused on other drivers of UK economic underperformance as well as assuming Brexit is not a major input in the BoE’s policy decision-making process at the moment.”

“Tomorrow’s speech by BoE’s Governor Andrew Bailey in Sintra will be the main event of the week. A broadly hawkish message could further help the pound stabilise and possibly drag EUR/GBP back below 0.86.”