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26 Feb 2015
EUR/GBP targeting 0.72 on a 1-m view – Westpac
FXStreet (Barcelona) - Richard Franulovich, assesses the macro outlook for EUR and GBP, expecting a EUR/GBP move lower towards 0.72 as possible on a 1-month view.
Key Quotes
“EUR/USD not showing much inspiration either way. The local data flow has undeniably improved and some data points point to clear green shoots.”
“The EZ services PMI due next week should build yet further on recent gains, certainly that’s the message from surveys like ZEW, and thanks to slightly firmer energy prices the advance EZ Feb CPI may well show a small monthly increase.”
“However, amid QE and a poor capital flow backdrop EUR will struggle to capitalize on improved data trends. EUR/ USD is unlikely to trade much beyond 1.15 if at all.”
“Would not fight the recent down move in EUR/GBP even though the UK calendar offers little in the way of fresh impetus to extend the downside next week. Political risk seems to have eased if the latest voter intention surveys, showing reduced odds of an inconclusive result, are to be believed. The BoE’s narrative has shifted too, to one of looking through a near term fall in inflation and emphasising the next move in rates will be up.”
“All told GBP atmospherics have improved. EUR/GBP to 0.72 not an impossible target on a 1 month horizon.”
Key Quotes
“EUR/USD not showing much inspiration either way. The local data flow has undeniably improved and some data points point to clear green shoots.”
“The EZ services PMI due next week should build yet further on recent gains, certainly that’s the message from surveys like ZEW, and thanks to slightly firmer energy prices the advance EZ Feb CPI may well show a small monthly increase.”
“However, amid QE and a poor capital flow backdrop EUR will struggle to capitalize on improved data trends. EUR/ USD is unlikely to trade much beyond 1.15 if at all.”
“Would not fight the recent down move in EUR/GBP even though the UK calendar offers little in the way of fresh impetus to extend the downside next week. Political risk seems to have eased if the latest voter intention surveys, showing reduced odds of an inconclusive result, are to be believed. The BoE’s narrative has shifted too, to one of looking through a near term fall in inflation and emphasising the next move in rates will be up.”
“All told GBP atmospherics have improved. EUR/GBP to 0.72 not an impossible target on a 1 month horizon.”