EUR/GBP to remain volatile – Danske Bank

According to Jakob Ekholdt Christensen, Chief Analyst at Danske Bank, GBP’s appetite remains modest as the Brexit debate in the House of Commons continues, which is likely to result in volatility for the EUR/GBP and it remains sensitive to Brexit news in coming days.

Key Quotes

“We think it is very likely that the Brexit situation will remain unresolved after the vote on 11 December, indicating that the period of high volatility in GBP crosses will be prolonged into 2019. The UK Prime Minister lost some important votes yesterday on the first day of the Brexit debate in the Parliament and it now looks set to take over control of the final Brexit path. Hence, tails of the ‘post Brexit EUR/GBP outcome distribution’ have become even more ‘fat’ with the probabilities of a new referendum and a cancellation of Brexit increasing. In our main scenario, we still expect a decent Brexit to eventually unfold, which should pave the way for break lower in EUR/GBP.”