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13 Jan 2016
GBP remains vulnerable – Danske Bank
FXStreet (Edinburgh) - Analyst at Danske Bank Kristoffer Lomholt has reiterated that the British pound remains exposed to further weakness in the near term.
Key Quotes
“Yesterday’s price actions underscore the very bearish GBP sentiment at the moment and while GBP could remain under pressure in the short term due to weak risk appetite and a dovish stance from the Bank of England tomorrow, a lot of negativity has been priced in to the market, in our view”.
“Moreover, GBP is significantly oversold, both technically and according to our short-term financial models, which indicates that EUR/GBP at 0.728 would be fair given the latest decline in UK interest rates”.
“We still expect GBP to recover in the coming months and target EUR/GBP at 0.71 in 6M on relative growth and relative rates”.
Key Quotes
“Yesterday’s price actions underscore the very bearish GBP sentiment at the moment and while GBP could remain under pressure in the short term due to weak risk appetite and a dovish stance from the Bank of England tomorrow, a lot of negativity has been priced in to the market, in our view”.
“Moreover, GBP is significantly oversold, both technically and according to our short-term financial models, which indicates that EUR/GBP at 0.728 would be fair given the latest decline in UK interest rates”.
“We still expect GBP to recover in the coming months and target EUR/GBP at 0.71 in 6M on relative growth and relative rates”.