EUR/GBP: Risk of move to 0.92 on a 2 to 3-month view – Rabobank

Eren Sengezer FXStreet

Rabobank analysts note that the British pound has received a boost from the latest round of upbeat macroeconomic data releases from the UK.

Key quotes

"The numbers suggest that consumers may be more active than expected while inflationary forces could be growing. These data will likely emphasise the concerns of some market participants that huge levels of monetary and fiscal stimulus combined with supply chain disruption will result in higher prices."

"That said, it appears that the consensus among major central banks and the broad community of economists is that any current price pressures will be temporary. The better tone of UK data has pushed back on fears of a negative policy rate from the Bank of England. By contrast, the latest UK political developments have little to offer sterling."

"The latest round of talks on a trade deal between the UK and the EU have drawn to a close with no breakthrough agreement in sight. Unless this status quo alters in the weeks ahead, EUR/GBP is likely to be pushed higher. We see risk of move to EUR/GBP 0.92 on a 2 to 3-month view if a compromise on trade with the EU remains elusive."

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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