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- EUR/GBP to move towards 0.86 on a Brexit agreement – Danske Bank
EUR/GBP to move towards 0.86 on a Brexit agreement – Danske Bank
FXStreet reports that economists at Danske Bank expect to see EUR/GBP move towards 0.86, If we get a simple free-trade agreement.
“In line with our expectation, negotiations have extended into November and we are still yet to see a Brexit agreement. We expect a deal in the second half of November but will be more concerned if there is no progress around 1 December, which we believe would weigh on GBP if this is the case.”
“As our base case remains a simple free-trade agreement covering goods and that a deal will be finalised over the next two to three weeks, we expect EUR/GBP to move lower in the very near term, supported by the positive vaccine news favouring cyclical currencies. We forecast 0.86 in 1-12 months, which we believe will be the new trading midpoint in the coming year, although we believe risk is skewed towards it going lower than 0.86 in the very near-term in the event of a deal. If we are wrong and instead head for no deal, we believe EUR/GBP will move markedly higher (yet stay below parity).”
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