EUR/GBP to target 0.8630 if the ECB raises rates – SocGen
|Cable consolidates after a 0.5% bounce on Wednesday. Economists at Société Générale analyze GBP outlook.
Expectations for the BoE meeting declined to around 18 bps after the 0.5% contraction in July GDP
We note that expectations for the BoE meeting next week declined to around 18 bps after the 0.5% contraction in July GDP rekindled concerns of recession. Gilts rallied sharply and spreads have come in vs Bunds and Treasuries after two days of outright disappointing stats.
GBP/USD bounced back after trading down to the 200-DMA at 1.2430.
EUR/GBP is likely to remain volatile today with investors potentially targeting Wednesday’s high of 0.8630 if the ECB raises rates.
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