GBP/USD to perhaps trade to the strong side of a 1.2625-1.2685 range – ING

A keen focus for today's Bank of England meeting will be the vote split. Economists at ING analyze Sterling’s outlook ahead of the Monetary Policy Report.

Upside risks to EUR/GBP

Back in November, there were still three hawks voting for a 25 bps hike. The degree to which the vote split softens from 6-3 will impact Sterling today.

Also in focus will be the BoE's forward guidance and whether it softens its view that policy needs to stay restrictive for an 'extended period'. Shifting this guidance to 'for quite some time' or more dovishly to 'some time' could hit Sterling.

We probably see upside risks to EUR/GBP today, i.e., to 0.8655 or even 0.8685, while GBP/USD should be more supported against the softer Dollar.

GBP/USD to perhaps trade to the strong side of a 1.2625-1.2685 range.