GBP still under pressure, BoE sees no rush to hike – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen sees the Sterling coming under further pressure in the next months.

Key Quotes

“The GBP weakened by 1.3% against the EUR yesterday, as the Bank of England appeared to be in no rush to raise interest rates and highlighted the risks to the economy from the upcoming Brexit, taking the cross again one figure higher above 0.862”.

“Uncertainty remains high and we expect the cross to remain volatile and continue to react strongly to Brexit news”.

“We expect to see more GBP weakness in the coming months as the triggering of Article 50 moves closer. We target EUR/GBP at 0.88 in 3M, but stress that risks are skewed to the upside relative to our forecast, and we recommend maintaining high hedge ratios on GBP exposure”.