EUR/GBP: Brexit transition deal is not a game changer - Danske Bank

Matías Salord FXStreet

Analysts from Danske Bank, do not expect EUR/GBP to move significantly lower before receiving more clarification on how will be the future relationship.

Key Quotes:

“This week, the EU and UK reached an agreement on a transition period lasting from 30 March 2019 until year-end 2020. While positive, it is not the game changer and in any case a deal was widely expected. The negotiations on the future relationship are going to be much more complicated, not least with respect to the outstanding Irish border issue.”

“EUR/GBP fell on the transition agreement but we do not expect EUR/GBP to move significantly lower before we get more clarification on what the future relationship is going to look like.”

“We target EUR/GBP at 0.86 in 6M and 0.84 in 12M. Our call for a lower EUR/GBP is also supported by Bank of England, as the BoE meeting this week has not changed our view that the BoE will hike twice this year (May and November).”

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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