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EUR / GBP falls below 0.8950 against a firmer pound

  • EUR / GBP is moving lower and reaches levels below 0.8950.
  • The pound is making up lost ground amid higher hopes for deals.
  • Political Uncertainty Will Weigh Pound’s Short-Term Outlook – Rabobank.

The euro has traded lower against the British pound for the third day in a row, extending its reversal from last week’s highs just above 0.9000, to session lows below 0.8950. The pair has been hit by a modestly stronger British pound amid heightened hopes for a Brexit deal.

The pound rises on hopes of a Brexit deal

The British pound has appreciated across the board on Tuesday after The Sun newspaper reported that UK chief negotiator David Frost told Boris Johnson that he expects the trade deal to be signed “early next year. week”.

However, investor enthusiasm was cooled by another Reuters report claiming Prime Minister Johnson has warned his top ministers that the Brexit deal is far from secure. These comments have controlled GBP longs.

EUR / GBP: Political Uncertainty Will Limit Sterling Outlook – Rabobank

Looking beyond Brexit, Rabobank’s currency analysis team sees little hope for a relevant rally in the British pound in the medium term: “Disorder within the Conservative party suggests that Johnson may not hold his position during the current election period. . This means that even when Brexit is in the rear view mirror, UK politics are likely to remain complicated. We forecast EUR / GBP at 0.89 in a 3-month view and 0.88 in a 6-month view. However, the emerging political outlook in the UK suggests that these predictions may prove optimistic for the pound. “

Technical levels

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