EUR/GBP Seen at 0.75 in 3-Month – Rabobank
Jane Foley, Senior FX Strategist at Rabobank, believes the cross could slip lower towards 0.75 in a 3-month view.
“While sterling is likely to be fixated on political risk over the next couple of months, there is a risk that this will be reflected as a drag on economic data. In the minutes of the April MPC meeting, the BoE reported that “business surveys had reported a softening in investment intentions, consistent with expenditure decisions being deferred pending the outcome of the (EU) referendum”.
“While we would expect the pound to bounce on a ‘Remain’ vote on June 23, the prospect of slower growth and a delayed BopE rate hike will take a toll. Assuming a Remain vote in June, we expect EUR/GBP to push back towards 0.75 on a 3 mth view well above its November low”.