EUR/GBP - page 13
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Why? It is clear that gbp is falling faster than eur
Depends on France and Italy
I have a long position, TP is at 0.8810.
I have a long position, TP is at 0.8810.
London Close: Pound to Euro Rate Forecast to Recover, IMF Raise Growth Forecasts
Despite a woeful start to the day for Pound Sterling against the Euro we have watched the UK currency steadily recover its dignity.
GBP/EUR has recovered from a knee-jerk sell-off as markets show they are wary that the Prime Minister delivers a positive surprise in her much-anticipated speech on Tuesday.
Also aiding confidence in the UK unit was an upgrade to the UK's growth profile by the IMF.
The IMF's World Economic Outlook now sees UK growth standing at 1.5% in 2017, up from a previous forecast for 1.1%.
The IMF based the upgrade on the observation that domestic demand has held up better than expected in the aftermath of the Brexit vote.
As we note in this report, the strong economic performance of the UK economy is at odds with the Pound's valuation - in short - it is grossly undervalued.
May's Speech is Key Event-Risk Ahead
Pound Sterling has received a beating at the hands of its foreign exchange bretheren thus far in 2017, with the brunt of the spanking coming on Monday January 16.
The falls are owed largely to media reports that the Prime Minister, when delivering a key speech on Tuesday, will signal that controlling immigration is a central aim of upcoming Brexit negotiations.
This of course suggests the UK will be exiting the single market, as membership of the club comes with the free movement of people.
Markets continue to bet heavily against Sterling in anticipation of this inevitable exit from the single market, with data from the CFTC confirming selling the currency remains one of the more popular foreign exchange trades of 2017.
But, nothing ever moves in a straight line in finance and we believe risks have increased that some recovery strength lies ahead.
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British Pound to Euro Exchange Rate Forecast to Rise as May Brings Certainty BUT Targets are Cut
he UK Government have clarified their position ahead of Brexit negotiations and analysts have responded by adjusting their forecasts for Pound Sterling in light of the new information.
Pound Sterling was sent sharply higher after Prime Minster May delivered the Government’s objectives on Brexit and in doing so setting aside months of uncertainty.
Markets hate uncertainty, and with some certainty the Pound can stretch its legs.
"May’s speech provided clarity where there was uncertainty, and if there is anything markets hate, it is uncertainty," says Joshua Mahony at IG. "With everything now out in the open, there is a good chance we will see the Pound start to recover from here on out."
Is the Recovery Sustainable?
Is this the beginning of a more sustained rally, or just a jump ahead of a continuation lower?
To analysts at Nordea Markets, this is the start of a recovery.
The bank believe the Pound is heading higher from here, however, not as high as they had initially assumed.
In a note to clients Chief Analyst Johnny Bo Jakobsen says he is cutting his initial targets in response to the Government’s desire to seek a hard-Brexit.
“The UK government is prepared to accept a hard Brexit. Until now, however, our baseline for the UK economy has been based on the assumption of a soft Brexit, assuming that the UK would eventually end up with a deal which would ensure continued access to the EU internal market including service
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I shorted, TP is at 0.8600.
Best British Pound To Euro Exchange Rate Of 1.16 After Today's Dovish ECB, 1.21 Is Possible Say Lloyds Forecasts
Thursday afternoon's session found the GBP/EUR at the 1.1600 level and was up around 0.6% on the day due to broad weakness in the Euro.
Investors sold off the euro following a press conference from European Central Bank (ECB) President Mario Draghi on Thursday afternoon.
Draghi stated that Eurozone inflation pressure remained subdued. He also reminded markets that the economic outlook still contained many downside risks.
The exchange rate started the day on a stronger footing following an additional speech from Theresa May.
Where do leading analysts see the GBP/EUR exchange rate in the short-term?
Lloyds, in a brief to clients on Friday, note "the cross [EUR/GBP] has a bear bias in the short term, after holding the 0.8860 resistance area"
"We see a move down to test support at 0.8600/.8560 but a break there is needed to confirm a deeper decline at this stage. Overall, we believe we are developing into a medium term range loosely between 0.89 and 0.8250."
This range low of 0.850 represents a best of 1.21 for the GBP/EUR.
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