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. 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds near 155.50 after Tokyo CPI inflation eases more than expected
USD/JPY is trading tightly just below the 156.00 handle, hugging multi-year highs as the Yen continues to deflate. The pair is trading into 30-plus year highs, and bullish momentum is targeting all-time record bids beyond 160.00, a price level the pair hasn’t reached since 1990.
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
FBI cautions against non-KYC Bitcoin and crypto money transmitting services as SEC goes after MetaMask
US FBI has issued a caution to Bitcoiners and cryptocurrency market enthusiasts, coming on the same day as when the US Securities and Exchange Commission is on the receiving end of a lawsuit, with a new player adding to the list of parties calling for the regulator to restrain its hand.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.