A modest bullish bias has been evident in EUR / GBP since mid-August, say economists at Rabobank, who are holding their year-end target for the cross at 0.84. They clarify that this means that the Bank of England (BoE) will be in a position to adopt a tone that reflects more confidence.
Key statements:
“There is scope for a further underperformance of the GBP against the EUR in the short term, although the 0.8600 area will likely act as firm psychological resistance.”
“Recent data has tempered any sense of urgency regarding the BoE’s adjustments, particularly considering that the current QE program must be completed before the end of the year in any event. The MPC (Monetary Policy Committee) will meet again on September 23, by then the next UK CPI inflation data, retail sales and employment data will be released. “
“Better UK economic data is likely needed to get EUR / GBP back on course for our target. year-end 0.84. “
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