20 Feb 2015
EUR/GBP points to further weakness near term – Danske Bank
FXStreet (Edinburgh) - Analysts at the Nordic lender Danske Bank expects the European cross to fall further in the short term.
Key Quotes
“EUR weakness coupled with a decent UK outlook will keep EUR/GBP under pressure for now”.
“Fundamentally, the UK economy is expected to continue to recover at a solid pace and we still look for the first hike to arrive in August. If we are correct, the BoE is priced much too dovishly (first hike set for Q1 16) and we see more upside potential in UK rates and look for a lower EUR/GBP in the coming 3 to 6 months as markets call for a re-pricing of MPC policy in a more hawkish direction”.
“On a 6 to 12 month’s horizon, we EUR/GBP to stabilise and eventually move higher as the eurozone recovers”.
Key Quotes
“EUR weakness coupled with a decent UK outlook will keep EUR/GBP under pressure for now”.
“Fundamentally, the UK economy is expected to continue to recover at a solid pace and we still look for the first hike to arrive in August. If we are correct, the BoE is priced much too dovishly (first hike set for Q1 16) and we see more upside potential in UK rates and look for a lower EUR/GBP in the coming 3 to 6 months as markets call for a re-pricing of MPC policy in a more hawkish direction”.
“On a 6 to 12 month’s horizon, we EUR/GBP to stabilise and eventually move higher as the eurozone recovers”.