EUR/GBP eyes on 0.92 in 6-month – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen sees the cross edging higher to the 0.9200 region in the medium term.

Key Quotes

“Our highest conviction view among major currencies has for some time been that the British pound (GBP) will weaken further”.

“The uncertainty with respect to the deal that the UK could get is likely to intensify further over the coming month with Theresa May saying yesterday that article 50 will be triggered ‘no later than the end of March next year’.

“In our view, the terms on which the UK withdraws from the EU will mitigate capital inflows to the country via the very large current account deficit. This could dominate the positive effect of the recent better-than-expected economic data, which could challenge market expectations of another Bank of England rate cut”.

“As a result, we still expect EUR/GBP to edge higher and forecast the cross at 0.92 in 6M”.