EUR/GBP has been mostly failing to hold below the 0.90 level in recent months though the pair is currently struggling near multi-month lows, below 0.8900 mark. Looking ahead, economists at Rabobank see EUR/GBP recovering to 0.92 amid Brexit issues but hints of a trade deal can drop the pair below 0.90.
Key quotes
“In the coming months UK fundamentals have the potential to offer significant direction for the GBP crosses. The EU has indicated that October is the latest possible deadline for talks insofar as its member nations need time to ratify the deal before the close of the Brexit transition phase at the end of the year. There remains a substantial amount of ground to be covered with fishing rights and competition rules among the most contentious areas.”
“Nervousness over the Brexit talks could see EUR/GBP pushing towards 0.92 in the coming months, though signs that a trade deal can be agreed in the coming weeks will be positive with EUR/GBP set to drop convincingly below the 0.90 area.”
“Any deal, however, will subsequently be unpicked by market analysts, and any signs of confusion or indications that the UK has been dealt a poor hand will soon be reflected in GBP.”
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