Chief Analyst at Danske Bank Allan von Mehren assessed the recent performance of the European cross.
Key Quotes
“EUR/GBP settled above 0.90 on Friday as the bounce in EUR/USD helped the lift the pair further into the 0.90 territory”.
“Appetite for GBP risk remains weak due to rising Brexit concerns, and the rising Brexit premium is also evident in the FX option market, where implied GBP volatility has increased substantially and the market has become more bid for GBP calls”.
“In the short term, we reckon that renewed selling pressure on EUR/USD could help curb the upside in EUR/GBP, but we believe still it is too early to call the top in EUR/GBP yet. There are no key data releases out of the UK this week and focus remains on political news.
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