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15 May 2015
EU referendum risks, EUR/GBP set to drop - ING
FXStreet (Barcelona) - Chris Turner of ING, expects EUR/GBP to head towards 0.65 by next summer.
Key Quotes
“UK politics has surprised again by delivering a majority Conservative government. The 2% risk premium of a hung parliament/fresh elections is currently being removed from GBP.”
“We see much more potential for GBP to rally against the EUR than the USD (given the EUR’s far greater role in the GBP trade weighted index) and see EUR/GBP to 0.65 next summer. This is premised on an EU referendum taking place in 1H17.”
“Were PM Cameron to pursue a more confident strategy of a 1H16 referendum, we would revise up our EUR/GBP profile to accommodate this earlier than expected event risk.”
Key Quotes
“UK politics has surprised again by delivering a majority Conservative government. The 2% risk premium of a hung parliament/fresh elections is currently being removed from GBP.”
“We see much more potential for GBP to rally against the EUR than the USD (given the EUR’s far greater role in the GBP trade weighted index) and see EUR/GBP to 0.65 next summer. This is premised on an EU referendum taking place in 1H17.”
“Were PM Cameron to pursue a more confident strategy of a 1H16 referendum, we would revise up our EUR/GBP profile to accommodate this earlier than expected event risk.”