EUR/GBP seen around 0.83 in 12-month – Danske Bank
|Morten Helt, Senior Analyst at Danske Bank, believes the European cross should grind lower towards the 0.83 area within a year’s view.
Key Quotes
“With an August rate hike still in sight in our view we see relative interest rates as neutral for EUR/GBP for now, but expect GBP to eventually gain support from the rate channel. We target 0.88 in 1M and 0.8650 in 3M”.
“Longer term, Brexit still remains a key driver for GBP, and while uncertainty remains high, we still expect EUR/GBP to eventually trade lower driven by Brexit clarifications and fundamental valuations. The turn in capital flows and FDI flows back into the UK, as indicated in the latest balance of payment data, suggest that a key headwind to GBP seen in Brexit is reversing, supporting the case for additional GBP appreciation over the medium term. We target EUR/GBP at 0.84 in 6M and 0.83 in 12M”.
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.