EUR/GBP could rise back to 0.9325 if fear of a no-deal Brexit returns – Rabobank


Analysts at Rabobank expect the EUR/GBP pair to trade close to 0.90 in 3 months and around 0.87 on a 6-month view.

Key Quotes: 

“EUR/GBP has run into support in the 0.8850 area as investors await the next instalment of political news in the UK. Some attention will inevitably be drawn to the BoE policy meeting later this week.”

“Having reached a high around EUR/GBP 0.9148 on September 3, GBP has subsequently been the best performing G10 currency. We would argue that this move has been driven by the fact that the market had become very short of GBP and motivated by glimmers of optimism about the prospect for compromise on the issues surrounding the Northern Ireland border.”

“In the months ahead, GBP will also likely face a general election. If a no-deal Brexit is ruled out by a new government we would expect EUR/GBP to clamber down towards 0.86 in 3 months, and for cable to rise to around GBP/USD1.28. Scope for additional upside could be limited if the pound continues to be unsettled by further rounds of Brexit negotiations under a Corbyn led government.”

“If fear of a no-deal Brexit returns (on a Johnson led government) we see risk of EUR/GBP rising back to the recent high in the 0.9325 area initially and beyond towards parity if the prospect of any fresh compromise with the EU fell away.”

“Scope for any subsequent recovery in GBP would likely be dictated by how chaotic the initial stages of a no-deal Brexit proved to be.”

“Our central view has been that EUR/GBP will trade close to 0.90 in 3 months and around 0.87 on a 6 month view. This forecast has built around the assumption that Brexit will be delayed and that a deal will eventually be accepted. An election later this year would suggest that a significant revision to our 3 month forecast would likely be called for.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD consolidates around 1.1150 amid mixed trade headlines

EUR/USD is trading around 1.1150, consolidating previous gains. President Trump has expressed optimism about clinching a deal with China, while some officials have cast doubts. Brexit headlines are set to impact the euro as well.

EUR/USD News

GBP/USD edges higher ahead of critical vote on the Brexit deal

GBP/USD is rising above 1.2950 as parliament is set to debate and vote on UK PM Johnson's Brexit deal. The vote on the program to complete the process quickly is also critical. 

GBP/USD News

USD/JPY holds steady above mid-108.00s

The USD/JPY pair failed to capitalize on the early uptick to multi-day tops and is currently placed at the lower end of its daily trading range, just above mid-108.00s.

USD/JPY News

Gold edges up to $1490 area, lacks follow-through

Gold edged higher through the early European session on Tuesday and is currently placed at the top end of its daily trading range, around the $1489 region.

Gold News

Top 3 price prediction BTC, ETH, XRP: CFTC takes a surprisingly bold step to move cryptos forward

The CFTC is open to Ethereum futures without anyone picking-up the ball. XRP is currently the only bullish option currently in the Top Three. Current volatility levels have last been seen in May.

Read more

Forex MAJORS

Cryptocurrencies

Signatures