EUR/GBP: Striking difference, bearish on quant signal and macro outlook – Credit Agricole | Forexlive

Credit Agricole CIB Research is bearish EUR/GBP over the coming weeks.

“While EUR/GBP continues to trade range-bound and seems unable to break below the 0.87 level, we think that the risks for the pair have shifted to the downside in recent weeks. According to our FAST FX model, which is based on short-term rate spread, peripheral yield spread to Bunds and a proxy for risk appetite among other drivers sold the overvalued EUR/GBP targeting a move towards a short-term fair value of 0.8670,” CACIB notes.

“Indeed, we think that the fundamental outlook for the EUR
may have taken a turn for the worse.. In contrast, the UK outlook seems
to be gradually improving following the ‘winter of discontent’,
which saw the economy plagued by strikes, a cost of living crisis and
persistent Brexit uncertainty,” CACIB adds.

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