EUR/GBP to move lower as pound still set to benefit from faster vaccinations – Danske Bank
|The cyclical GBP has extended its strong performance on the strong UK vaccination process and higher growth expectations which makes economists at Danske Bank forecast the EUR/GBP pair at 0.83 in 6-to-12 months.
Key quotes
“The UK is gradually reopening supported by fast vaccinations, which, combined with businesses getting used to the new EU-UK trading relationship, means that the outlook for the UK economy looks much brighter. We expect the UK economy will outperform the euro area this year, which supports our view of a lower EUR/GBP.”
“Eventually, the BoE is likely to tighten monetary policy earlier than the ECB, which marginally supports a lower EUR/GBP.”
“We expect GBP can strengthen further this year but we also recognise that it has come a long way with a lot of positivity already priced in.
“We will not be surprised if GBP takes a breather near-term fluctuating within the 0.85-0.865 range.”
“We have our 1-3M forecast for EUR/GBP at 0.85. We expect EUR/GBP to move lower again and forecast 0.83 in 6-12M.”
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.