EUR/GBP buy the dips sub-0.8500 – Danske Bank

Senior Analyst at Danske Bank Mikael Milhoj suggested that dips below the 0.8500 area represent buying opportunities.

Key Quotes

“EUR/GBP dipped below 0.85 again yesterday despite weak UK consumer credit and mortgage approvals data”.

“As such, further USD support, i.e. driven by increased expectations that the Fed may hike interest rates this year, is likely to support EUR/GBP downside in the very short term”.

“We expect EUR/GBP to trade higher in coming months driven by weak UK fundamentals and growth and additional monetary easing from the Bank of England”.

“We regard dips below 0.85 as buying opportunities for investors looking to sell GBP-, EUR- and DKK-based corporates hedging GBP income”.