Piet Christiansen, Senior Analyst at Danske Bank, notes the European cross could still edge higher.
“The dip in EUR/GBP following the strong UK inflation prints yesterday proved short -lived as expected and the cross ended the day slightly higher”.
“The market is already pricing in a 19bp hike in May and we see limited potential for additional pricing at this early stage. We see risks moderately skewed to the upside for EUR/GBP near term, with Brexit negotiations stuck internally”.
“Strategically, we are bearish EUR/GBP and would consider selling EUR/GBP on rallies above 0.8950”.
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