EUR/GBP seen within 0.8650-0.9000 – Danske Bank

The European cross is seen within a 0.8650-0.9000 range for the time being, noted Senior Analyst at Danske Bank Jens Pedersen.

Key Quotes

“EUR/GBP ended last week slightly higher driven by a sell-off in GBP/USD after strong US data”.

“For GBP, attention this week will be on the Bank of England (BoE) meeting on Thursday where focus will be on the BoE’s inflation projection in the short-term”.

“The oil price has increased while sterling has strengthened, and while we reckon that the net effect is likely around zero for inflation, market is now pricing in 55% probability of a rate hike already in May”.

“We think the appetite for making a big signal shift at this meeting is low and that the BoE might take a wait - and-see approach. This could send EUR/GBP slightly higher this week. Overall, we still expect EUR/GBP to trade within the 0.8650-0.90 range in the near term”.