The EUR/GBP moved down after the announcement, with the divided vote of hard line occupying the center of attention. The still cautious guide delivered today highlights the most gradual approach of the BOE, reports Danske Bank, Kirstine Kundby-Nielsen.
EUR/GBP will move down in the next quarter
“In a broader way, we hope that the EUR/GBP moves downward in the next quarters driven by a relatively hard line BOE compared to its peers of the G10, an investment environment characterized by adjusted credit differentials and a positive correlation of the GBP with a positive investment environment for the USD (which we hope will return).”
“While we are still waiting for a rebound in growth in the United Kingdom driven by a fiscal stimulus, the change in the fiscal position in Germany leaves the impact of the most attenuated relative growth perspective for the crossing. The main risks are the reactivation of concerns about debt and a relaxation of relaxation of more forceful policies by the BOE.”
Source: Fx Street
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