EUR/GBP to rise to parity on no-deal Brexit – Rabobank

Analysts from Rabobank, have a three month target for the EUR/GBP pair at 0.90, but they warn that in the case of a no-deal Brexit it could rise to 1.  |  14/08/2019 20:49

Analysts from Rabobank, have a three month target for the EUR/GBP pair at 0.90, but they warn that in the case of a no-deal Brexit it could rise to 1.00. 

Key Quotes: 

“Stronger than expected UK CPI inflation data this morning has a modest impact on the short end of the curve. The move, however, has not been sufficient to distract attention from the pressure that has been exhibited on the longer end of the curve. This morning the inversion of the 2 to 10 year section of the curve has triggered the headlines that this is the first such move since the financial crisis. Since curve inversion is usually seen as a precursor to recession, it is no wonder that the money market continues to point to a BoE rate cut next year. That said, the UK government is flirting with the option of a no deal Brexit on October 31 this year. This would doubtless bring a further drop in the  value of the pound and a ratcheting up of headline inflation in the UK. The BoE thus has a difficult path to tread in the next couple of years.”

“Or house view remains that Brexit is likely to be delayed beyond October. This is likely to bring a sigh of relief from investors and a modest reprieve for the pound. However, insofar as kicking the can down the road is not a solution, any GBP bounce is likely to be half-hearted. Our 3 month forecast is EUR/GBP 0.90. On a no deal Brexit we see EUR/GBP rising to parity. We do expect some recovery in the following months but the pace and extent of this will depend on how the country copes during the winter months.”

Share

Popular News

Show More Popular News

TheFXApp's Views

TheFXApp analyses will provide both fundamental and technical comprehensions on finance
and other asset classes for TheFXApp viewers

Back

Login to TheFXApp Account

Your TheFXApp account gives you access to the tools that we offer our customers including our
Technical Studies & Sentiment for your accounts.

Forgot Password?

Don't you have a TheFXApp account? With a few easy steps you can easily register to TheFXApp

Create a TheFXApp's Account

Your TheFXApp account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

register_ty

Thank you!

Welcome to TheFXApp family!

You have succesfully completed the registration.
We will send you an e-mail to give you some
instructions and our Terms and Conditions!
Our account representatives will be contacting you as
soon as possible. If you have any further questions
please do not hesitate to mail us via info@thefxapp.com