EUR/GBP between Brexit and the BoE – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen assessed the prospects for the European cross in the next months.

Key Quotes

“EUR/GBP increased slightly on the back of the higher UK unemployment rate and weak employment growth released yesterday”.

“However, the market is still pricing in 20bp for a rate hike in May, and we do not expect today’s UK GDP figures to alter this”.

“For now, key risk factor for GBP remains Brexit ahead of the EU summit on 22-23 March”.

“We expect EUR/GBP to trade within the range of 0.8880-0.8925 in the short term, while the wide range of 0.8650-0.90 is likely to remain intact in coming months with the prospects of BoE rate hikes curbing the upside potential”.