Back
10 Dec 2015
EUR/GBP with less support from relative rates - Danske Bank
FXStreet (Córdoba) - According to Danske Bank analysts, the change in Bank of England rate projections, lead to a revisions in EUR/GBP estimations, for a higher forecast in the short-term but lower in a six month period.
Key Quotes:
“As we now expect Bank of England to hike in Q2, we only expect the BoE to hike two times in 2016 taking the Bank Rate to 1% by the end of 2016. Hence we have revised our 3M EUR/GBP forecast higher to 0.71 (previously 0.68) as GBP now should see less support from relative rates in the coming months.”
“With the first Bank of England hike now expected in Q2 instead, we now forecast EUR/GBP to drop to 0.70 in 6M (was 0.71). Longer term, we still expect the cross to stabilise and eventually move gradually higher, and we keep our 12M target unchanged at 0.73.”
Key Quotes:
“As we now expect Bank of England to hike in Q2, we only expect the BoE to hike two times in 2016 taking the Bank Rate to 1% by the end of 2016. Hence we have revised our 3M EUR/GBP forecast higher to 0.71 (previously 0.68) as GBP now should see less support from relative rates in the coming months.”
“With the first Bank of England hike now expected in Q2 instead, we now forecast EUR/GBP to drop to 0.70 in 6M (was 0.71). Longer term, we still expect the cross to stabilise and eventually move gradually higher, and we keep our 12M target unchanged at 0.73.”