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    EUR/GBP expected at 0.76 in 1-monh – Danske Bank

    Morten Helt, Senior Analyst at Danske Bank, sees the cross picking up further downside pace within a month’s view.Key Quotes“Given the high uncertainty surrounding the EU referendum, we see risks skewed to the upside for EUR/GBP ahead of 23 June”.“The outlook for EUR/GBP very much depends on the outcome of the EU referendum. GBP has weakened significantly over the past weeks as Brexit concerns reappeared in financial markets following the release of several polls showing a lead for the ‘leave’ camp”.“In our main scenario, we assume a status quo for the UK, meaning that people vote to remain in the EU”.“This implies that the GBP appreciates immediately after the referendum and we expect EUR/GBP to decline to the 0.7500-0.7650 range post the election. We target EUR/GBP at 0.76 in 1-3M”.“Longer term, we project further EUR/GBP downside driven by relative growth and relative monetary policy. We target EUR/GBP at 0.74 in 6M and 0.75 in 12M but stress that these forecasts are subject to significant digital risk”.

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