EUR / GBP recovery from week lows near 0.9000 stops below 0.9100

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  • EUR / GBP rally from 0.9000 level stops at 0.9100.
  • The pound is holding firm despite growing concerns of a no-deal Brexit.
  • EUR / GBP is seen at 0.8900 in three months – Rabobank.

The euro has been unable to extend its recovery from weekly lows at 0.9000 to levels above 0.9100 on Friday. The pair found resistance just above 0.9100 earlier today and has dipped to the 0.9070 area, on its way to close the week without major changes.

The pound remains stable despite speculation about “hard Brexit”

The pound was fairly stable on Friday despite a lack of progress in Brexit negotiations with the EU and a call from British Prime Minister Boris Johnson to prepare for a no-deal Brexit. The market seems to remain confident in the possibility of a last-minute deal, backed by comments from the president of the European Commission, Ursula van der Leyden, who stated that the EU will continue to work for a deal.

Beyond the Brexit saga, the Bank of England’s monetary policy stance has also added pressure on the GBP this week. The Bank of England asked UK banks if they were willing to adapt to negative interest rates, openly assuming that they are considering further monetary tightening measures.

EUR / GBP heads towards 0.89 in three months – Rabobank

Rabobank’s currency analysis team is also confident of a Brexit deal that will push the euro towards 0.89: “In addition to this, the UK economy and its public finances will be severely damaged by the crisis and the debate over the potential of a negative bank the rate remains in the background. After some short-term volatility, we see scope for EUR / GBP to drop to 0.89 on a 3-month perspective, assuming the UK and EU will put some kind of Brexit deal in place before December 31st. ”

Credits: Forex Street

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