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10 Sep 2015
EUR/GBP expected to grind lower in Q4 – BTMU
FXStreet (Edinburgh) - Derek Halpenny, European Head of GMR at BTMU, assesses the bearish prospects for the European cross for the next months.
Key Quotes
“The depreciation of the pound is more questionable versus the euro than versus the dollar. The uncertainty over Fed policy leaves near-term direction over the direction of GBP/USD unclear”.
“However, the advance of the euro looks unsustainable. Position liquidation was a factor in the jump in EUR/GBP and with the ECB expressing determination to extend QE if required, we doubt EUR/GBP will advance much further even if market turmoil escalates”.
“Indeed, given the UK’s strong domestic economic fundamentals we would argue that the pound should perform well now that rate expectations have already been pushed out to Sept/Oct next year”.
“We still see a much higher chance of a Feb 2016 rate increase from the BOE than the market does and EUR/GBP is set to fall back below the 0.7000 level during Q4”.
Key Quotes
“The depreciation of the pound is more questionable versus the euro than versus the dollar. The uncertainty over Fed policy leaves near-term direction over the direction of GBP/USD unclear”.
“However, the advance of the euro looks unsustainable. Position liquidation was a factor in the jump in EUR/GBP and with the ECB expressing determination to extend QE if required, we doubt EUR/GBP will advance much further even if market turmoil escalates”.
“Indeed, given the UK’s strong domestic economic fundamentals we would argue that the pound should perform well now that rate expectations have already been pushed out to Sept/Oct next year”.
“We still see a much higher chance of a Feb 2016 rate increase from the BOE than the market does and EUR/GBP is set to fall back below the 0.7000 level during Q4”.