Rabobank lowered its EUR/GBP forecasts across the board, with Senior FX Strategist Jane Foley now seeing the pair around 0.85 over a 3-month horizon. Foley said France's political and fiscal issues are arguably in a more difficult position currently than those of the UK, which has allowed EUR/GBP to push lower ahead of the October 28 UK budget and should cap upside potential for the currency pair. She noted that UK budget concerns are already priced into the British Pound, leaving GBP less vulnerable to a sell-off versus the Euro than it would be otherwise, and said Chancellor Healey faces a difficult task on October 28. Rabobank expects EUR/GBP to trade in a choppy range around current levels on a 1 to 3 month view, with pullbacks likely to offer the Euro some reprieve from current selling pressure, though the single currency is expected to remain on the back foot for now.
Rabobank cuts EUR/GBP forecast, citing French fiscal/political risks that keep the Euro on the back foot.
UK budget concerns already priced into GBP, leaving it less vulnerable than the Euro per Rabobank.
