EUR/GBP: Substantial weakness – Danske Bank

EUR/GBP dropped below 0.88 yesterday to a new one-month low at 0.87621 and the move lower was not driven by any specific Brexit-related news or data releases and thus GBP performance seems to be a continuation of a gradual repricing of Brexit risk premium, suggests Chief Analyst, Jakob Ekholdt Christensen at Danske Bank.

Key Quotes

“We remain bullish on GBP over the medium term, targeting 0.85 in 12M but stress that risks are that a break lower in the cross could come sooner than our forecast indicates, and that the cross might break considerably lower.”