Economists at Rabobank note that there has been an upward bias in EUR/GBP since the middle of February and, therefore, still see the pair trading at 0.92 on a three-month view. They recommend buying the cross on dips.
Key quotes
“The failure of the UK government to provide reassurances on the outlook for trade and the impact of the UK’s high covid-19 death toll on confidence provides a grim backdrop for the UK economy.”
“Given that the UK maintains a current account deficit, this could trigger additional downside pressure. We view the pound to be a very vulnerable currency.”
“Since the 2016 Brexit referendum EUR/GBP has spent relatively little time above the 0.90 level. That said, currently we would favour buying dips. We retain our three-month forecast of EUR/GBP 0.92.”
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