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.”
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