Ongoing potential for economic divergence vs the EU combined with GBP-positive seasonality in April leads the Credit Suisse analyst team to revise the EUR/GBP target lower from 0.8450 to 0.8400.
Key quotes
“Unfortunately for the EU, the impression of petty negativity towards the UK only causes further loss of confidence in its ruling political class that many feel should really be focused instead on getting its own vaccination game right. This only adds to reasons to mark down EU animal spirits and by extension EUR prospects.”
“We note that April tends to be a seasonally positive month for GBP, which many link to dividend payments by UK companies in that month, many of which have overseas operations and therefore repatriate funds in order to make these payments. Typically, GBP strength in April is reversed by weakness in May. But for now, it tallies with our existing view set to add a further reason to expect EUR/GBP to reach for our new 0.8400 target in April.”
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