A much less dovish ECB has despatched EUR/GBP near 0.87. Some extra optimism from the German Ifo right this moment might ship EUR/GBP again to the 0.8735 excessive seen in April, ING’s FX analyst Chris Turner notes.
EUR/GBP to edge in the direction of 0.88 subsequent yr
“This comes at a time when UK exercise is lower than spectacular. And ECB commentary a few resilient economic system and a possible decide up in enterprise funding (ought to some uncertainty start to clear) appears to face in distinction to the fiscally constrained UK economic system. On this topic, there’s discuss that 5 November would be the UK finances day.”
“We had been in search of EUR/GBP to edge in the direction of 0.88 subsequent yr, however a much less dovish ECB might carry that concentrate on nearer. Key to that story can even be eurozone arduous knowledge and inflation prints, which our eurozone staff nonetheless suppose might result in a now very underpriced (25%) September ECB charge reduce.”
