Market Outlook: Sterling May Rise Further Against a Weak Euro

Forex - Rabobank forex strategist Jane Foley stated that, given the structural and political issues facing France and Germany, the pound could rise further against a weak euro. Foley remarked, "Despite the significant issues facing the UK economy, it at least has a stable government and budget. The euro could remain under pressure next year, allowing EUR/GBP to stay on a slow downward trajectory." While this is not Rabobank's current forecast, it suggests that pre-Brexit levels in EUR/GBP could come into view. Rabobank expects EUR/GBP to drop to 0.8150 within 12 months; these levels were last seen immediately after the Brexit referendum in June 2016.