EUR/GBP: Rate-driven Sterling rally increases the chance of a test of parity in next couple of years – SocGen

Sterling is 2023’s top G10 currency. Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes EUR/GBP outlook.

EUR/GBP might stay below 0.90 for much of the rest of the year

We might get below 0.85 as we wait for the MPC meeting on Thursday, and we might stay below 0.90 for much of the rest of the year, but EUR/GBP will continue to grind lower on the days when we watch rates and jump higher when we assess the economic damage the hikes will cause. 

Perversely, the current rate-driven Sterling rally increases the chance of a test of EUR/GBP parity in the next couple of years.