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FX Strategy - Brexit Scenarios And Outcomes For EUR/GBP

ByDanske Markets
Published 11/16/2018, 11:37 PM
Euro British Pound
0.14%
MMM
0.18%

Near term, the political situation in the UK will be pivotal for the GBP. We expect EUR/GBP to stabilise and fall back into in the 0.865-0.88 range if, as we expect, Theresa May survives a vote of confidence. However, EUR/GBP is likely to remain volatile ahead of a Brexit vote in the House of Commons.

In our main scenario, where we expect a decent Brexit, we expect EUR/GBP to break lower and settle around 0.83 in 3M (NYSE:MMM).

However, the likelihood of our main scenario has declined substantially, while the probability of other scenarios, such as a no-deal scenario, has increased.

We expect EUR/GBP to test 1.00 in a no-deal scenario, while we expect EUR/GBP to break lower into the 0.82-0.86 range if the UK calls a second referendum.

To read the entire report Please click on the pdf File Below:

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