EUR/GBP: Choppy trading in the coming months, a move to 0.84 by year-end – Rabobank

Analysts at Rabobank continue to see choppy range trading for the EUR/GBP in the weeks ahead. They retain a forecast that the currency pair could still push to 0.84 by year end. 

Key Quotes: 

“The May 6 publication of the BoE’s Monetary Policy Review should add a little more flavour to forecasts regarding the outlook for UK growth this year. Since England’s partial winding back of Covid restrictions on April 12, anecdotal evidence has been adding to market expectations that UK growth this year will outstrip previous forecasts.”

“While there is scope for optimism on the economic front, the pound is confronted by a round of headlines regarding sleaze in government circles. To date, GBP has mostly shrugged these reports off, largely because the UK electorate is well aware of the PM’s less than squeaky clean reputation. That said, the current accusations regarding ‘curtain-gate’ are unlikely to disperse as quickly as the PM would like. This means that politics still has the capacity to knock confidence in the pound, just as the electorate prepares for the May 6 local English, Mayoral and Welsh and Scottish parliamentary elections.”

“On balance we are expecting choppy trading in the coming months with EUR/GBP likely edging lower to the 0.84 area by the end of the year.”