GBP likely to be range-bound this week – ING

ING analysts are looking for range-bound GBP as the UK has entered its five-week election campaign period.

Key Quotes

“The market seems to be already pricing a majority Conservative Party victory (a benign outcome for GBP in our view) which suggests a limited upside to GBP at this point. Should pre-election polls start to show rising odds of a hung Parliament, this would in our view lead to some reversal of sterling gains from the previous month.”

“Another sharp fall in the level of employment (Tuesday) would emphasise that the jobs market is no longer tightening. Hiring indicators point to deteriorating demand for staff amid Brexit and global uncertainty. Oct CPI inflation (Wednesday) should decline to 1.5%YoY, but Oct retail sales (Thursday) should rise by 3.3%YoY. Like the Bank of England meeting this week, the data should be of secondary importance for sterling and the effect on the currency should be short-lived and limited. All the matters for GBP at this point is the upcoming parliamentary elections. Our mildly bearish EUR/USD view suggests mildly lower GBP/USD this week.”