EUR/GBP can edge towards 0.84 by year end – Rabobank

Eren Sengezer FXStreet

"The fact that the BoE is ahead of the ECB in terms of policy normalization has motivated our expectations that EUR/GBP can edge towards 0.84 by year-end," Rabobank analysts said.

Key quotes

"Unlike the ECB, the BoE’s asset purchases programme will soon be complete and the debate about a 2022 rate hike is live in the market (though we favour 2023). By contrast, even if the ECB’s emergency PEPP programme is retired in March, its APP purchase plan will likely be increased. It follows that there is no expectation of an ECB rate hike any time soon."

"That said, this news is priced in and our forecasts of a moderately firmer GBP vs, the EUR during Q4 will be in jeopardy if the UK economy and related expectations surround BoE policy lose steam."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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