The analysts of rabobank point out that they have EUR/GBP 12-month forecast revised down to 0.87 from 0.90 and explain:
Long EUR positions have started to wind down
“Since the ECB’s last rate hike at the end of July, the market has become less sure about the chances of another monetary policy move. While the decision is likely to be very close, we have thought for some time that the Council The Government will remain on the sidelines at the September meeting, and recent favorable economic data has supported this outlook.The German IFO business climate survey revealed a further deterioration in confidence in August, while the German PMI surveys and French were surprisingly weak.”
“CFTC speculator data shows that net long positions in the euro have started to narrow. However, net long positions remain elevated from a historical perspective. If the ECB keeps monetary policy unchanged next week Next, the Euro is likely to be vulnerable.This could trigger a move of EUR/GBP towards the bottom of its recent range at 0.85.Given weak growth in Germany, we have revised our 12-month EUR/GBP forecast down to 0.87 from 0.90“.
Source: Fx Street
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