European investors have seen value in the pound this morning after it was sold off overnight with EUR/GBP pulling back to levels held around the European close on Friday, per Raobank.
Key quotes
“The UK GfK consumer confidence survey unsurprisingly showed a sharp fall. The headline figure for the final March reading was -34, down from a February reading of -9.”
“Fears that this year’s virus-associated recession could be lengthened by the inability of the UK and the EU to sort out a trade deal before the start of 2021 could enhance downside potential for GBP.”
“Tomorrow, there will be a call between Eurozone finance ministers. A continued failure to compromise could widen the perceived cracks in the Eurozone and weigh on the EUR.”
“While Eurozone politics could limit downside pressure for EUR/GBP in the coming weeks, we expect cable will remain soft. We see scope for another dip to 1.19 on a 3-month view.”
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