EUR/GBP expected at 0.84 in 12-month – Danske Bank
|Senior Analyst at Danske Bank Morten Helt believes the European cross could retreat to the 0.84 area within a year’s view.
Key Quotes
“We expect the combination of higher UK interest rates and Brexit clarification to move GBP away gradually from fundamentally undervalued levels. In particular, with the BoE now more firmly signalling a gradual hiking cycle, the case for a lower EUR/GBP has strengthened as we now expect the BoE to ‘out-tighten’ the ECB in the coming 12 months”.
“Consequently, on 8 February, we lowered our EUR/GBP forecast to 0.87 in 3M, 0.86 in 6M and 0.84 in 12M. We see risks skewed towards the cross both breaking lower sooner and considerably lower than our forecast indicates. As the market pricing of a May rate hike already looks relatively hawkish, we see limited downside potential in the short term. We target 0.88 in 1M”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.