EUR/GBP to stay within the 0.86-0.89 range – Danske Bank

Valtteri Ahti, chief strategist at Danske Bank, notes that the EUR/GBP cross is little changed despite rising political turmoil in the UK after seven labour MPs yesterday left the party in protest.

Key Quotes

“In isolation, this is not a game changer, in our view, and even if other MPs from both sides follow and leave the two big parties, the implications for Brexit and thus GBP are unclear.”

“We expect EUR/GBP to stay within the 0.86-0.89 range short term with Brexit negotiations as the key driver for the cross. Unless prospects of a deal improves, appetite for GBP could come under pressure as the next Brexit vote in the UK House of Commons moves closer (expected on 27 February).”