EUR/GBP: Liquidity concerns to weigh on GBP in the near-term – Danske Bank – by MSalordFX EURGBP Banks
“Given the sizeable expected increase in the twin-deficit, we see a level shift having taken place in EUR/GBP, with the cross to trade in a higher range. In the near-term, we expect high“We forecast EUR/GBP at 0.89 in 3M as we expect to see fragile risk appetite, where
concerns weigh on GBP. Further out, we remain cautiously optimistic that the cross will head lower as a global growth slowdown and the relative appeal of UK assets to investors are a positive for GBP relative to EUR.”moving above 0.90 is a sharp selloff in risk where capital inflows fade and liquidity becomes scarce. This risk has only increased with the outlook of further unfunded fiscal easing.
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