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Jane Foley, Senior FX Strategist at Rabobank, sees scope for GBP to make a little more headway vs the EUR later this year, but after this year’s strong start, the pound is likely to see further setbacks along the way.

Key quotes

“EUR/GBP retains a more consolidative profile, though the recent lows in the 0.8535 area are likely to act as strong support.”

“Later this week, UK February retail sales data are due for release. The market is expecting a healthy 2.1% m/m bounce back with surveys indicating a rise in demand for non-food items such as school uniforms boosted sales despite the ongoing physical closure of non-essential shops. The tone of this release could determine the direction for the pound over the next week or so”

“We are expecting EUR/GBP to trade choppily around 0.86 potentially through the coming quarter before pushing to 0.85 later in the year.”

“Cable is likely to struggle to return to 1.40 in the absence of a move by EUR/GBP back to 1.20.”