EUR/GBP has settled above 0.87. Kit Juckes, Chief Global FX Strategist at Société Générale, believes that the pair could advance nicely towards the 0.90 level. Sterling unlikely to enjoy much more of a relief bounce.
“EUR/GBP has reversed the spike which we saw in late September but remains well above the post-Brexit average, and GBP/USD is even further above average than EUR/GBP. Both measures of volatility should fall further, as the pound settles down.”
“But with the economy surely already in recession and set to suffer from possibly even tighter fiscal policy, sterling is unlikely to enjoy much more of a relief bounce and over time, EUR/GBP is likely to meander slowly up to 0.90 or so.”
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