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Apr 23 - 05:00 PM
EUR/GBP: Range-Trading For Longer With Brexit Postponed - Danske
First appeared on eFXplus on Apr 23 - 03:00 PM

Danske Research discusses EUR/GBP outlook in light of revising its forecasts to account for a longer period of range trading around  0.85-0.87 in 3-12 months.

"With a medium to long Brexit extension and no reason to believe May’s deal will pass or that cross-party talks will prove successful any time soon, we think it is difficult to see much further GBP-strengthening near term. Hence, we have raised our GBP forecasts throughout the forecast horizon and look for EUR/GBP to remain range-bound at 0.85-0.87 in 1-3M. It is more difficult to predict what will happen when we get closer to the new Brexit deadline in October, but as we think a further extension is likely, we expect the cross to remain at 0.85-0.87 also in 3-12M," Danske argues. 

"In case of a no deal Brexit by the end of October, we still expect EUR/GBP to move towards parity. If May’s deal passes, we would expect EUR/GBP to move down to 0.83. We target the cross at 0.86 in 1M and in 3M (prev. 0.83), 0.86 in 6M (0.82), and 0.86 in 12M (0.83).," Danske adds. 

Source:
Danske Research/Market Commentary

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