EUR/GBP further downside expected – Danske Bank

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Edinburgh) - According to Morten Helt, Senior Analyst at Danske Bank, the EUR/GBP could intensify its downward path, as the pound gets stronger.



Key Quotes



“The UK money market currently prices in the first rate hike Q1 15”.



“However, given Carney’s hawkish statement last night, the market could begin speculate that a rate hike could be on the cards already in H2 this year”.



“Hence, a re-pricing of the UK money market curve could add near-term support to GBP against both EUR and USD”.



“All in all, the combination of the BoE moving towards the first rate hike and the prospect of euro weakness on the back of the ECB easing means we expect EUR/GBP to move lower over the coming year”.



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