EUR/GBP: Brexit trade talks to undermine the pound - Rabobank

Matías Salord FXStreet

According to analysts from Rabobank, anxiety around the trade talks between the European Union and the United Kingdom is likely to weigh on GBP. They forecast EUR/GBP at 0.89 in 3m, 0.90 in 6m, 0.88 in 9M, 0.84 in 12m and at 0.78 in 24M.

Key Quotes:

“Since the BoE turned clearly hawkish in September 2017, GBP has drawn support from expectations of higher interest rates. News in December of an EU/UK agreement on the legacy issues connected with Brexit and the subsequent confirmation of a deal regarding the post Brexit transition period have also supported sterling.”

“While a May rate hike from the BoE is largely priced-in, the pound may find further support if the MPC lean towards another rate hike in November.”

“We expect anxiety regarding the EU/UK trade talks to undermine the pound on a 3 to 6 mth view. On a 12 mth view we expect GBP to rise on an anticipated free trade deal.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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