EUR/GBP to avoid a dive below the 0.83 level – Commerzbank

Sterling should remain supported in the coming weeks as the UK continues to endorse market’s bets on Bank of England (BoE) tightening. Nonetheless, analysts at Commerzbank do not expect the EUR/GBP to fall below the 0.83 level.

ECB is likely to hike its key rate in the autumn

“The market is likely to stick to its expectations which points towards sterling initially remaining strong against the euro.”

“The ECB is likely to hike its key rate in the autumn. We assume that the situation for the euro will then change, in particular as the market will in all probability have to adjust its expectations for British key rate to the downside at some point.”

“At 0.83 in EUR/GBP the end of the line is likely to have been reached, levels below that do not seem sustainable to me, but will only be short excursions – if we see them at all.”