Danske Research discusses EUR/GBP outlook and maintains a tactical bullish view in the near-term, and a strategic bearish view in the medium- to long-term.
"EUR/GBP has been very stagnant around the 0.8850 level since the EU approved the Brexit deal. Yet, the vote in the UK House of Commons remains a big hurdle and the path towards Brexit will be very uneven. Hence, we expect GBP to remain volatile with risk skewed to the upside for EUR/GBP near term," Danske argues.
"We argued that a 'Brexit corrected' EUR/GBP fair value estimate is around 0.82 (previously 0.83), suggesting that our 6-12M target for the cross at 0.83 could be a bit conservative in terms of GBP appreciation potential if (as we still expect in our main scenario) we end up with a decent Brexit," Danske adds.