According to Jane Foley, Senior FX Strategist at Rabobank, the European cross could head towards the 0.70 handle in a year’s view.
Key Quotes
“GBP fell sharply in Q1 on the back of concerns over a potential Brexit following the June 23 referendum. It is impossible to predict how the UK trade relationship with the EU would look on a Brexit”.
“Opinion polls suggest that the vote could still go either way. According to the PM’s Political Strategist Crosby, polls are indicated that one quarter of those favouring ‘remain’ were unlikely to vote”.
“Given that uncertainty is compounded by the large quantity of ‘undecideds’, sterling is set for a rocky ride in the next few months”.
“We see GBP/USD as the better medium to express a negative sterling view given potentially negative implications for the EUR from a Brexit. Our forecast of EUR/GBP 0.70 in 12 months assumes the UK votes to remain within the EU”.
(Market News Provided by FXstreet)