On a one-month view, EUR/GBP has crept up by 1.8% and broken well above the psychologically important 0.90 level. Negative internal developments such as the prospect of a negative interest rate or a current account deficit can lift the pair to 0.92, per Rabobank.
“The fact that the pound is the worst performing G10 currency on a one-month view highlights the extent of negative domestic pressures. We expect EUR/GBP to head on towards 0.92 on a one-to-three month view”
“The combination of negative rates and a current account deficit could leave the pound particularly exposed to downside pressure. Although it is not our central view, this scenario could push EUR/GBP back to the 1.00 area.”
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