Because of higher-than-expected inflation and the Fed’s hawkish tilt, the EUR/GBP has dropped to 0.85. Analysts at Danske Bank are still positive on the pound, predicting EUR/GBP at 0.83 in 12 months, despite the fact that they are more optimistic about the UK than the eurozone.
“The UK recovery is expected to continue in H2. Due to the vaccines, the historical link between new cases and hospitalizations has diminished dramatically, and the UK will reopen fully on July 19th.”
“Inflation has been stronger than expected in recent months, confirming our prediction that the Bank of England will tighten monetary policy ahead of the European Central Bank.”
“We still expect EUR/GBP to fall in the next months, as we are more optimistic about the UK economy than the euro zone. We also believe that a more hawkish Fed and Bank of England will help the pound.”
“We’re shooting for 0.83 in 12M.”/n
