Economists at Rabobank are maintaining a positive stance on the Pound Sterling (GBP) for the current year. They anticipate that the EUR/GBP pair will trend lower towards 0.8400 in the latter half of 2024.
The constructive outlook for GBP against the EUR is underpinned by Rabobank’s expectation that the Bank of England (BoE) will likely maintain a stable policy stance until September. This stands in contrast to their projections of rate cuts from both the European Central Bank (ECB) and the Federal Reserve (Fed) anticipated in June. Rabobank’s forecast aligns with a movement towards EUR/GBP 0.8400 in the latter part of the year.
Rabobank’s analysis factors in the interest rate differential, indications of an improving economic landscape in the UK, alongside expectations of a subdued UK election and a relatively stable political environment. These elements collectively are expected to offer modest support for the Pound.
Looking ahead, Rabobank anticipates a recovery for Cable, GBP/USD, towards the 1.3000 region over a 12-month timeframe. However, they acknowledge the potential for short-term fluctuations driven by periods of USD strength over a one-to-three-month horizon.
