EUR/GBP to move lower towards 0.85 over the coming year – Danske Bank

EUR/GBP is now trading around 0.89. Economists at Danske Bank remain cautiously optimistic that the pair will head lower, targeting 0.85 in 12 months.

EUR/GBP to remain elevated in the near-term

“We expect EUR/GBP to remain elevated in the near-term given the 1) uncertainty as to regards the size and persistence of a structural shift in UK fiscal policy, 2) the global investment environment characterised by high-risk aversion and 3) declining commodities support EUR/GBP.”

“Looking forward, the positive USD environment is usually benefitting GBP relative to EUR. We thus forecast the cross to remain elevated at 0.86 in 3M, before falling to 0.85 in 12M on the back of a stronger USD.”