EUR/GBP seen at 0.8700 in 1-month – Danske Bank

Senior Analyst at Danske Bank Morten Helt expects the GBP to remain under pressure and EUR/GBP to test 0.87 in a month’s view.

Key Quotes

“GBP has performed relatively well over the past month, as the economic data out of the UK have been better than expected”.

“While data suggests that the UK may avoid recession in H2 16, we still expect the BoE to cut the Bank Rate by 15bp from 0.25% to 0.10% in November but it is a very close call and depends on data”.

“The likelihood of more QE is low, however, and given the stronger-than-expected economic development post the UK’s EU referendum, we have revised our 1-6M EUR/GBP forecast slightly lower to 0.87 (0.88) in 1M, 0.88 (0.90) in 3M and 0.92 (0.95) in 6M”.