So far this year, the pound has gained ground against the US dollar and the euro. Rabobank economists forecast that EUR / GBP will be around the 0.89 / 0.88 zone in the coming months, while a return to the 0.87 level is not expected until the end of the year.
Key statements:
“The upcoming meeting of the Bank of England on February 4 may bring some additional color to the UK inflation outlook, although for now the market appears to be more confident that a negative bank rate will be avoided.”
“The fact that restrictions in the UK could be extended into March and given the evidence that its rapid vaccine program is still far from halting the pandemic in the country, we see scope for further gains in the pound to be limited to short term”.
“We maintain our forecast that EUR / GBP is likely to trade in the 0.89 / 0.88 region in the coming months. and we may not see a return to the 0.87 level until later in the year. “
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