EUR / GBP Analysis

EUR / GBP Analysis

The EUR / GBP is trading near the 0.90 level, the pair is supported at the 0.895 level. Rabobank economists expect rhat the EUR / GBP to rise to 0.92 due to the Brexit deal and anticipation of negative interest rates. “The EUR / GBP failed to stay below the 0.895 level, suggesting that the GBP's good performance may have been over. Following the Brexit fear and the continuing UK labor market deficits, it is preferable to buy EUR / GBP, considering that another move above the level of 0.90 may be more likely. Uncertainties about Brexit, under the shock of Covid-19 restrictions, meant that the market was reluctant to deny the possibility of the BoE being forced to use negative interest rates at some point. Unlike other countries that use a negative rate, as long as the UK has a current account deficit, the GBP is likely to be particularly vulnerable in this scenario. According to a six-month view, we see that EUR / GBP is heading towards 0.92 in a three-month view on Brexit uncertainty before recovery. "