EUR/GBP to grind lower towards 0.84 by year-end on better UK data – Rabobank

A modest upward bias has been evident in EUR/GBP since the middle of August. Economists at Rabobank maintain their year-end target of EUR/GBP 0.84. However, this assumes that the BoE will be in a position to adopt a more confident tone. 

The pound is languishing

“There is scope for some further underperformance of GBP vs the EUR near term, though the 0.8600 area will likely act as firm psychological resistance.”

“Recent data have dulled any sense of urgency with respect to BoE settings, particularly given that the current QE programme is due to be completed by year end in any case. The MPC will meet again on September 23, by then the next round of UK CPI inflation, production retail sales and labour data will have been released.”

“Better UK economic data will likely be needed to put EUR/GBP back on course for our 0.84 year-end target.”