EUR/GBP to move modestly higher in the coming year to 0.89 – Danske Bank

FXStreet Insights Team FXStreet

On Thursday, EUR/GBP declined on the back of the BoE statement but fully retraced the move following the ECB meeting. Economists at Danske Bank analyze the pair’s outlook.

Push-back on rate cut expectations

The Bank of England (BoE) decided to keep the Bank Rate (key policy rate) unchanged at 5.25%.

The BoE delivered hawkish communication in an attempt to push-back on market expectations of rate cuts next year.

Overall, we see relative rates as a negative for GBP and see the recent rebound as attractive levels to sell GBP. We continue to forecast EUR/GBP to move modestly higher in the coming year to 0.89.

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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