EUR/GBP seen grinding lower to 0.83 in 12-month – Danske Bank

Jakob Christensen, Chief Analyst at Danske Bank, sees the European cross targeting the 0.8300 handle within a year’s view.

Key Quotes

“EUR/GBP moved back up to the high end of 0.89s on Friday, driven by the broad-based EUR recovery. As such, the cross could still edge higher from here, but the market is relatively short GBP and the 0-2Y UK yield curve has flattened substantially since the Bank England raised the Bank Rate on 2 August, which should help curb the upside potential”.

“The Conservative Party congress on 30 September-3 October is the next key event ahead of the Brexit end game in Q4”.

“We target 0.89 in 3M and expect EUR/GBP to eventually trade lower towards 0.83 in 12M driven by Brexit clarifications and valuation”.