Brexit and risk aversion hitting markets – Danske Bank
|Chief Analyst at Danske Bank Jakob Christensen noted the prospects for the sterling, the euro and the scandi space following ‘Brexit’.
Key Quotes
“The Brexit vote is setting the stage in the FX markets. The GBP is still falling this morning, while the EUR is also weaker generally”.
“We expect EUR/GBP to rise sharply to 0.85-0.90 over the coming month with elevated volatility”.
“We expect EUR/USD to fall to 1.07-1.09 over the coming 3M”.
“The NOK is falling on the back of the lower oil price and generally weak sentiment - we expect EUR/NOK to rise to 9.50-9.70 in 0-3M”.
“The SEK is also falling this morning. While there are fundamental arguments for a stronger SEK, there are other factors holding it back, such as, for example, repricing of the Swedish yield curve, growth worries and general risk-off sentiment. As such we expect EUR/SEK to stay high for longer with EUR/SEK rising to 9.60 in the short term”.
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