A note by Danske Bank's analyst Mathias Mogensen
He says that he sees the BOE raising rates in its May meeting by 25 bps, but expects EUR/GBP to keep a range-bound pattern in the near-term.
"We still expect the Bank of England to hike the bank rate by 25 bps in May, which should curb the upside risk in EUR/GBP in the coming month, and we still look for EUR/GBP to trade within the 0.8700-0.8850 range near term", Mogensen argues.
Adding that sterling is a little weak after recent PMI data disappointed, but he says that it could be due to bad weather.
"The GBP once again came under modest selling pressure yesterday, as the UK service PMI disappointed and the composite PMI fell to the lowest since the EU referendum. Overall, this week's PMI figures indicate downside risks to activity in coming months and while we see signs that the activity is slowing, it is worth noting that weaker activity can be partly explained by unusually bad weather conditions", he says.
