GBP/USD will likely simply track EUR/GBP and make its way slowly back to 1.30 – SocGen
|Calmer times for Sterling. Economists at Société Générale expect GBP/USD to track EUR/GBP and move gradually higher toward 1.30.
EUR/GBP’s underlying trend remains upwards, slowly
“Since the start of November, Sterling has tracked five-year yield differentials, with a narrowing in the UK-German spread of nearly 110 bps in November-January taking EUR/GBP from 0.86 to almost 0.90.”
“Unless yield differentials narrow significantly from here, we may well find that EUR/GBP becomes dull for a while, trading at 0.87-0.92 over the coming months. Against that backdrop, GBP/USD will likely simply track EUR/GBP and make its way slowly back to 1.30.”
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.