EUR/GBP to test 0.92-0.95 range if May loses a vote of confidence – Danske Bank

Analysts at Danske Bank offer their outlook on the EUR/GBP cross on the probable scenarios on the outcomes of the UK PM May’s leadership challenge.

Key Quotes:

“Probability UK PM May remains as a leader and that parliament votes yes to her Brexit deal "has declined substantially" 

See EUR/GBP to fall into a 0.865-0.88 range if May remains in charge.

EUR/GBP to remain volatile ahead of parliament's Brexit vote.

A "decent Brexit" looks less likely, but EUR/GBP to 0.83 in three months if so.

The probability of a no-deal scenario has increased … EUR/GBP could test 1.00.

If May resigns or loses a vote of confidence --> EUR/GBP to 0.92-0.95 range.

In case of a second Brexit referendum, EUR/GBP to be seen between 0.82-0.86.

A Remain vote to drag EUR/GBP below 0.80.”