EUR/GBP to move back towards 0.87-0.88 over the coming 12 months – Danske Bank

The past month, EUR/GBP has continued its move lower, now trading around mid-0.85. Economists at Danske Bank analyze the pair’s outlook.

GBP rebound to prove temporary

In the near-term, we expect the GBP momentum to continue and the cross to trade around the 0.86 figure. However, we believe it is only a question of time before the gap between surprise indices closes and markets will scale back on BoE rate hike expectations. 

We do not see the global investment environment nor the relative growth outlook to create a significant divergence between EUR and GBP. We thus expect the cross to move back towards 0.87-0.88 over the coming 12 months.