Further downside pressure lies ahead for GBP – Danske Bank

According to Jens Sorensen, Chief Analyst at Danske Bank, there is no signs of a relief for British Pound at least in the near term.

Key Quotes

“GBP stabilised somewhat yesterday and EUR/GBP fell back to just below the 0.90 level. The move lower in EUR/GBP was mainly driven by the downward pressure on EUR/USD though, and we still think it is too early to call for a stabilisation in GBP risk premium”.

“Market pricing of future BoE rate hikes is still a bit on the hawkish side, in our view, suggesting that it would be difficult to justify a strong rally in GBP driven by strong data and higher interest rates in the UK in the short term”.