4 Sep 2015
EUR/GBP headed to 0.7000 - Rabobank
FXStreet (Guatemala) - Jane Foley, Senior Currency Strategist at Rabobank explained that for some time they have forecast that the first rise in BoE rates is likely to be May 2016.
Key Quotes:
"Headwinds stemming from weaker growth in emerging markets suggest there is risk that the date for lift off could be pushed back.
However, since this dynamic is also affecting the outlook for ECB policy, it does not shift our view that EUR/GBP is likely to trend lower.
Investors may be less willing to short the EUR to fund investments into risky EM currencies but sterling is not a high risk currency.
We view the recent up move in EUR/GBP as overdone and look for a test of 0.70 on a 6 mth view."
Key Quotes:
"Headwinds stemming from weaker growth in emerging markets suggest there is risk that the date for lift off could be pushed back.
However, since this dynamic is also affecting the outlook for ECB policy, it does not shift our view that EUR/GBP is likely to trend lower.
Investors may be less willing to short the EUR to fund investments into risky EM currencies but sterling is not a high risk currency.
We view the recent up move in EUR/GBP as overdone and look for a test of 0.70 on a 6 mth view."