As a result of the UK’s Brexit referendum in June 2016, the trading range for EUR/GBP swiftly adjusted from trading mostly below the 0.80 level in H1 that year to an average of around 0.8590 in H2 2016, Rabobank’s FX analyst Jane Foley notes.
EUR/GBP seems to be eyeing the downside
“Since July 2016 the average trading level for EUR/GBP has been 0.8690. However, having started 2023 close to that average level, the currency pair has subsequently been on a slow grind lower. Last month EUR/GBP dipped close to the 0.8260 level and is currently trading only modestly above this low.”
“This raises the question as to whether GBP can achieve pre-Brexit referendum levels vs. the EUR in the foreseeable future. Our 12-month forecast for EUR/GBP is 0.8150. This falls short of a move back to pre-referendum levels. That said, it would take the currency pair below the 2022 low to levels last seen In June 2016, just after the referendum result was published.”
“In our view, downside risk to this forecast is more likely to come from a weaker than expected EUR rather than a more emboldened pound.”
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
AUD/USD recovers above 0.6150 on China's support measures, ahead of trade data
AUD/USD is finding its feet in the Asian session on Monday, attempting recovery above 0.6150 from over four-year troughs. China's pro-growth measures lift the Aussie amid a broadly risk-averse market environment and persistent US Dollar strength. China's trade data awaited.
USD/JPY remains pressured near 157.00 amid risk aversion
USD/JPY stays pressured near 157.50 early Monday, having reversed from near 158.00 region in the last hours. Risk-off sentiment on hawkish Fed expectations and US economic resilience weigh on markets, reviving the safe-haven appeal of the Japanese Yen amid looming BoJ rate hike risks.
Gold: Buyers face exhaustion below $2,700
Gold price trades with mild losses near $2,690 on the stronger US Dollar in the Asian session on Monday. However, the safe-haven demand due to uncertainty surrounding the President-elect Donald Trump administration's policies might help limit the Gold’s losses.
Week ahead: US CPI and China GDP in focus, UK data eyed too as Pound skids
US inflation report to take centre stage as Dollar remains well bid. China’s economic policies to come under scrutiny as Q4 GDP on tap. UK CPI and GDP figures to be watched as Pound’s pain worsens.
Think ahead: Mixed inflation data
Core CPI data from the US next week could ease concerns about prolonged elevated inflation while in Central and Eastern Europe, inflation readings look set to remain high.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.