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Jan 05 - 12:55 PM

ING: Bullish Outlook for EUR/GBP with a Target of 0.88 in Q1

By eFXdata  —  Jan 05 - 11:30 AM

Synopsis:

ING provides a positive outlook for EUR/GBP, projecting an upward movement for the currency pair in the near future. The forecast includes potential influences from UK fiscal policies and ECB easing cycle dynamics.

Key Insights:

  1. Bullish Stance on EUR/GBP:

    • ING forecasts a bullish trend for EUR/GBP, with a target of 0.88 by the end of the first quarter.
  2. Influence of UK Fiscal Policy:

    • The potential outperformance of Sterling may be influenced by the UK fiscal scenario, particularly with the Conservative government indicating further tax cuts ahead of a probable election in the latter half of the year.
  3. Short-Term Trading Range and ECB Repricing:

    • The short-term trading range for EUR/GBP is anticipated to have a lower limit at 0.8600.
    • Repricing of the ECB easing cycle could lead to a short-term adjustment back to around 0.8700.

Conclusion:

ING's bullish outlook for EUR/GBP, targeting 0.88 by the end of Q1, reflects expectations of currency dynamics influenced by UK fiscal policies and ECB decisions. The anticipation of further tax cuts in the UK and adjustments in the ECB easing cycle are key factors that could impact the EUR/GBP trading range in the short term. This forecast provides valuable insights for investors and traders monitoring the EUR/GBP currency pair amidst evolving economic and political landscapes.

Source:
ING Research/Market Commentary

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