EUR/GBP seen at 0.88 in 3M -  Danske

Analysts from Danske Bank see the EUR/GBP pair moving to the upside, but they revised their forecasts slightly lower.

Key Quotes:

“Economic indicators suggest better than feared growth post Brexit, but further Bank of England easing and imbalances in the UK economy will weaken GBP.”

“Our forecast of a weaker GBP is driven not only by BoE easing but also by the considerable imbalances in the UK economy, not least the significant current account deficit. In addition, net foreign debt accumulated through several years of current account deficits has made the GBP very fragile. Given the stronger-than-expected economic development post the UK’s EU referendum, we have revised our 1-6M EUR/GBP forecasts slightly lower.”

“We target EUR/GBP at 0.87 in 1M, 0.88 in 3M, 0.92 in 6M and 0.90 in 12M.”