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Negative outlook persists in EUR/GBP – Danske Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 6, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Edinburgh) - Chief Analyst at Danske Bank Arne Rasmussen believes the cross could resume its downside in the medium term.

    Key Quotes

    “Bank of England stroke a dovish tone at yesterday's meeting and sent GBP crosses lower: while keeping policy measures unchanged”.

    “The MPC now expects the strong GBP to weigh on inflation for longer”.

    “Fundamentally, we still think that the market’s pricing of BoE is too dovish - even if the more negative outlook for CPI inflation indeed is a threat to our call for a bank rate increase in February 2016”.

    “We expect EUR/GBP to trade gradually lower in the coming 3-6 months and emphasise that the cross could temporarily undershoot our forecasts around the time of the first BoE hike”.
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