EUR/GBP seen at 0.80 in 1-month – Danske Bank

Senior Analyst at Danske Bank Morten Helt believes the European cross could test the 0.80 area in a month’s view.

Key Quotes

“Given the high uncertainty surrounding the EU referendum, we see risks skewed to the upside for EUR/GBP ahead of 23 June. We forecast EUR/GBP at 0.80 in 1M and think it may inch even higher ahead of the referendum day”.

“Longer term, the outlook for EUR/GBP very much depends on the outcome of the EU referendum. In our main scenario, we assume a status quo for the UK, meaning that people vote to remain in the EU. This implies that the GBP appreciates immediately after the referendum”.

“We target 0.76 in 3M. Longer term, we project further EUR/GBP downside driven by relative growth and relative monetary policy. We target EUR/GBP at 0.74 in 6M and 0.75 in 12M but stress that these forecasts are subject to significant digital risk”.