EUR/GBP rangebound under 0.8400, with volatility expected to pick up as flash PMIs, central bank speak loom

• EUR/GBP has been rangebound on Monday within 0.8380-0.8400ish parameters with market attention predominantly elsewhere.
• But things will hot up from Tuesday with the release of flash UK and Eurozone PMIs.

FX market focus has predominantly been on USD crosses on Monday, amid a broad strengthening of the buck in wake of Jerome Powell’s renomination as Fed chair which spurred an unwinding of dovish “Brainard” bets. As a result, the EUR/GBP pair hasn’t gotten much love or attention and has seen pretty boring trading conditions, with the pair ranging between its 21-month lows at just above 0.8380 and the 0.8400 level.

Week Ahead

Things will almost certainly get more interesting and volumes pick up for the pair as the week draws on. Flash Eurozone and UK Markit PMI surveys for November are released on Tuesday early during the European trading session. The former will be of particular interest in the context of the recent surge in Eurozone Covid-19 infections that have now translated into a tightening on health restrictions. Traders will want to see how this affects the restriction-vulnerable services sector. Deterioration is expected after a deterioration was seen in the preliminary November Eurozone Consumer Sentiment survey released on Monday.

BoE speakers will also be in focus this week, with Monetary Policy Committee (MPC) member Jonathon Haskel speaking on Tuesday, MPC member Silvana Tenreyro on Wednesday and then Haskel and Bailey again on Thursday. Various ECB policymakers will also come out of the woodworks, including President Christine Lagarde, who speaks on Thursday and Friday.