EUR/GBP: Parity is not ruled out – Nordea

The EUR/GBP is now trading around 0.92. While it therefore may seem like there is a long way up to 1.00, analysts at Nordea would still not rule out that scenario.

Key quotes

“We do not think we have seen the highs in EUR/GBP yet.”

“Our model depicts that EUR/GBP could move to levels around 0.96 in the coming 1-3 months before seeing some stabilisation in H2 2020.”

“BoJo confirmed last week that the UK will leave the negotiation table in June, if a Canada+ agreement is not on the cards. It seems like the EU is some way off from accepting that, why the risk of a No-deal 2.0 could soon come into the minds of markets again.”

“The UK still appears to be lagging other European countries in terms of new corona cases and fatalities. If the UK follows the path of Italy or Spain, this is what poses the biggest risk for the UK financial system and could be the final trigger for EUR/GBP breaking parity.”