EUR/GBP poised for a knee-jerk near term – Danske Bank

Arne Rasmussen, Head of FI Research at Danske Bank, believes the European cross could slip back to lower levels in the very near term.

“As stated, we expect the BoE to keep policy unchanged today, which, needless to say, is also the general consensus”.

“Hence, price action in GBP will be determined by the voting result and accompanied comments. Last time, three out of eight voted for a hike, but since then one ‘hawk’ has left the MPC and expectations of a rate hike have been tempered”.

“This is in line with our belief that the central bank will stay on hold for longer. However, should we see more members joining the dissenting camp and yet another 5-3 vote, EUR/GBP is likely to correct lower”.