EUR/GBP recovery from week lows near 0.9000 stalls below 0.9100
- EUR/GBP recovery from 0.9000 area stalls at 0.9100.
- The pound holds its ground despite growing concerns of a no-deal Brexit.
- The EUR/GBP is seen at 0.8900 in three months – Rabobank.
The euro has been unable to extend its recovery from weekly lows neat 0.9000 to levels past 0.9100 on Friday. The pair found resistance right above 0.9100 earlier today and has pulled back to 0.9070 area, on track to close the week barely unchanged.
The pound remains steady despite “hard Brexit” speculation
The pound has remained fairly steady on Friday despite the lack of progress on the Brexit negotiations with the EU and Britain Prime Minister Boris Jonson’s appeal to get ready for a no-deal Brexit. The market seems to remain confident on the possibility of a last-minute agreement, supported by the comments of the European Commission President, Ursula van der Leyden, who affirmed that the EU will continue working for a deal.
Beyond the Brexit saga, the Bank of England’s monetary policy stance has also added pressure to the GBP this week. The BoE asked UK banks about their readiness to adapt to negative interest rates, assuming openly that they are considering further monetary tightening measures.
EUR/GBP seen heading down 0.89 in three months – Rabobank
The FX analysis team at Rabobank are also confident on a Brexit deal that will push the euro towards 0.89: “On top of this the UK economy and its public finances will be badly damaged by the crisis and the debate about the potential for a negative Bank rate remains in the background. After some near-term volatility, we see scope for EUR/GBP to head down to 0.89 on a 3-month view on the assumption that the UK and EU will put in place some sort of Brexit deal ahead of December 31.”
Technical levels to watch