EUR/GBP remains well supported – Danske Bank

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Allan von Mehren, chief analyst at Danske Bank, points out that GBP weakened versus both USD and EUR yesterday as the weaker-than-expected UK GDP figures weighed on appetite for the currency.

Key Quotes

“A falling CPI number (due tomorrow) could provide further support to EUR/GBP, but the key event this week is the Brexit vote in the House of Commons on Thursday, where the MPs have the opportunity to force PM Theresa May to ask the EU27 for an extension of Article 50.”

“If triggered, it will be supportive for GBP and could send EUR/GBP towards the lower end of the 0.86-0.89 range. However, given that the ‘meaningful’ vote has been postponed, we do not expect the debate on Thursday to change the Brexit outlook and we thus expect the 0.86-0.89 range to hold near term.”

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