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5 Feb 2015
Euro weakness could drag EUR/GBP lower in 2015 – Rabobank
FXStreet (Edinburgh) - According to Jane Foley, Senior Currency Strategist at Rabobank, the recent ECB announcements and the increased bearish tone around the euro will eventually take the cross to lower levels.
Key quotes
“Through much of last year, the pound was heavily influenced by speculation regarding the timing of the first BoE interest rate hike of the cycle”.
“The dovish November Inflation Report pushed back these expectations. The market is now not fully priced for the first hike until spring 2016. We do not expect the BoE to act until Feb 2016”.
“In the latter part of last year, the pushing back of BoE rate hike expectations afforded GBP protection against the weaker tone of the EUR and EUR/GBP traded in a choppy range”.
“However, the dovish ECB and the recent sharp falls in the value of the EUR has been the overwhelming feature of the New Year. EUR/GBP has broken down out of its recent range and we see risk of further falls”.
Key quotes
“Through much of last year, the pound was heavily influenced by speculation regarding the timing of the first BoE interest rate hike of the cycle”.
“The dovish November Inflation Report pushed back these expectations. The market is now not fully priced for the first hike until spring 2016. We do not expect the BoE to act until Feb 2016”.
“In the latter part of last year, the pushing back of BoE rate hike expectations afforded GBP protection against the weaker tone of the EUR and EUR/GBP traded in a choppy range”.
“However, the dovish ECB and the recent sharp falls in the value of the EUR has been the overwhelming feature of the New Year. EUR/GBP has broken down out of its recent range and we see risk of further falls”.