Having traded as high as 0.87 last week on the back of the softer UK CPI data, EUR/GBP is now back at 0.8570. Economists at ING analyze the pair’s outlook.

Sterling enjoys the travails of the Euro

This is entirely a Euro-driven move and does not represent some bullish re-appraisal of Sterling's prospects.

Given that we are mildly negative on the Euro going into Thursday’s ECB meeting and that UK rates might be dragged higher by US rates later today, we would say EUR/GBP could have a little more downside to the 0.8520 area over the next couple of sessions.