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Morten Helt, Senior Analyst at Danske Bank, believes the European cross could retreat to the 0.8300 region in a 3-month horizon.

Key Quotes

“The Bank of England meeting did not cause any significant reaction in EUR/GBP, but the cross broke below 0.88 later yesterday afternoon amid improved Brexit optimism on the back of a report by the Financial Times saying that the EU will explore a compromise on Northern Ireland that would give the UK stronger guarantees to avoid the customs border issue”.

“Brexit will remain key driver and source of volatility for GBP until a deal is reached. In our base case we target EUR/GBP in 0.83 in 3M assuming that a decent Brexit is reached within the time period”.