A less dovish ECB has sent EUR/GBP close to 0.87. Some more optimism from the German Ifo today could send EUR/GBP back to the 0.8735 high seen in April, ING's FX analyst Chris Turner notes.

EUR/GBP to edge towards 0.88 next year

"This comes at a time when UK activity is less than impressive. And ECB commentary about a resilient economy and a potential pick up in business investment (should some uncertainty begin to clear) seems to stand in contrast to the fiscally constrained UK economy. On this subject, there is talk that 5 November will be the UK budget day."

"We had been looking for EUR/GBP to edge towards 0.88 next year, but a less dovish ECB could bring that target closer. Key to that story will also be eurozone hard data and inflation prints, which our eurozone team still think could lead to a now very underpriced (25%) September ECB rate cut."