Relative rates weigh on EUR/USD and EUR/GBP – Danske Bank

By FXstreet.com | June 19, 2014 AAA

FXStreet (Edinburgh) -Further downside is expected in both the EUR/USD and the EUR/GBP, observed Sverre Holbek, Senior Analyst at Danske Bank.



Key Quotes



USD dropped last night as the FOMC statement was a little less hawkish than expected given the latest upside surprise in core inflation”.



EUR/GBP also rose slightly yesterday as the minutes from Bank of England were less hawkish than Mark Carney’s comments last week suggested”.



“All in all, however, rate hikes are still moving closer in both countries – albeit not imminent – as growth picks up and labour markets recover. This is very much in contrast to the eurozone, where the ECB is expected to remain on an easing bias for some time at least and we still expect relative rates to support the case for substantial declines in both EUR/USD and EUR/GBP in the coming 12M”.



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