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Economists at Rabobank continue to see a rocky road for GBP partly because UK Q1 economic data is likely to discourage the bullish outlook and also because Brexit is casting shadows. All in all, the EUR/GBP pair is forecast at 0.87 in the coming months.

Key quotes

“There is a strong risk that relief over the Brexit trade deal will run dry fairly quickly given its limitations.”

“For PM Johnson, the issue of Northern Ireland looks set to overlap with renewed calls for Scottish independence which are likely to strengthen after Scotland’s May elections in which Sturgeon’s SNP party is expected to perform well.” 

“During the course of the year we expect that the bounce back in UK GDP growth should provide moderate support for GBP and we see EUR/GBP moving to 0.87. However, we do not see a straightforward path for GBP bulls in the coming months.”