EUR/GBP TO ADVANCE NICELY TOWARDS 0.86 GIVEN POUND’S VULNERABILITY – RABOBANK

In the year to date, the British pound is the third worse-performing G10 currency after the JPY and the SEK. Economists at Rabobank expect the pound to continue facing headwinds over the coming months.

CONCERNS ABOUT GROWTH ARE CENTRAL TO THE POOR PERFORMANCE OF THE POUND

“The current cost of living crisis in the UK is consistent with even greater concerns about demand erosion which is likely to weigh on UK investment further. This in turn appears to be creating headwinds for the pound.”

“For GBP to rise above the weight of negative sentiment, optimism about the UK growth outlook will have to improve.”

“We maintain our view that GBP remains a vulnerable currency. Our three-month EUR/GBP forecast stands at 0.86”