EUR/GBP still seen at 0.92 in 6-month – Danske Bank

Senior Analyst at Danske Bank Morten Helt still sees the European cross edgig higher towards the 0.92 area in the medium term.

Key Quotes

“EUR/GBP declined significantly yesterday due to the combination of the High Court’s ruling and the BoE’s shift to a neutral stance”.

“In the short term, we expect GBP trading to be more volatile and further GBP appreciation should not be ruled out – ahead of the US election in particular on 8 November we could see a further reduction in short GBP/USD bets”.

“Over the medium term, we do not see today’s events as a major game changer for GBP. We still target EUR/GBP at 0.91 in 3M and 0.92 in 6M given that we still think that the combination of significant economic imbalances (large current account deficit and a negative net international investment position) and Brexit uncertainties justifies a significant undervaluation of the GBP”.