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27 Feb 2015
EUR/GBP: To continue trending lower this year - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that the EUR has been undermined this week by falling Eurozone bond yields on the back of speculation that the ECB could find it difficult to find sellers of bonds as it launches its QE programme in March.
Key Quotes:
"This move has driven up GBP’s yield advantage vs. the EUR which has pushed EUR/GBP to levels last seen in 2007 yesterday."
"Even though German economic survey days has seen an improvement in recent weeks, the dynamics behind the ECB’s forthcoming QE programme look set to have a more overwhelming impact on yields and thus on the EUR in the coming weeks as investors position themselves for the start of bond buying schedule."
"Even though UK election uncertainty suggests that the sterling crosses could be facing a volatile period, the attraction of sterling has been underpinned by low levels of yields across much of Europe."
"We expect EUR/GBP to trend lower this year, but see cable holding between 1.55 and 1.52 through much of 2015."
Key Quotes:
"This move has driven up GBP’s yield advantage vs. the EUR which has pushed EUR/GBP to levels last seen in 2007 yesterday."
"Even though German economic survey days has seen an improvement in recent weeks, the dynamics behind the ECB’s forthcoming QE programme look set to have a more overwhelming impact on yields and thus on the EUR in the coming weeks as investors position themselves for the start of bond buying schedule."
"Even though UK election uncertainty suggests that the sterling crosses could be facing a volatile period, the attraction of sterling has been underpinned by low levels of yields across much of Europe."
"We expect EUR/GBP to trend lower this year, but see cable holding between 1.55 and 1.52 through much of 2015."