Eurgbp To Move Higher

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Eurgbp To Move Higher

EUR/GBP To Move Towards 0.89, According To Danske Bank

The economists of the Danske Bank believe that the EUR/GBP pair will likely appreciate in the year 2024. They have set a bullish target of 0.89 for the EUR/GBP, which suggests that the pair has more upside momentum left in it.

A few days ago, the EUR/GBP turned lower after the statement issued by the Bank of England. However, the decline was quickly reversed after the meeting of the European Central Bank (ECB).

BoE Keeps Interest Rate At Historic 5.25%

The Bank of England (BoE) made no changes to its interest rate, which remains unchanged at near a historic 5.25%. In addition, the Bank of England also made several hawkish comments, which has put the rumors of rate cuts in 2024 to rest.

For the year 2024, the analysts believe that the relative rates (comparison between ECB & BoE) will be GBP negative. As a result, the EUR/GBP will likely move higher from its current level of 0.86. So, if we look at the bullish target of 0.89, it appears that the pair can gain an additional +300 pips in the year 2024 as well.

However, most of it is based on the assumption that the relative interest rate in Europe will be higher than in the United Kingdom. But if this turns out to be positive, it would mean more downside in the EUR/GBP. In that case, the support levels at 0.85, 083, and 0.80 will become really important.

Overall, it looks like the year 2024 will be the year of rate cuts as several central banks, including the Federal Reserve (USA), have already given hints. Against this backdrop, there's a good chance that we may see similar actions from the BoE and the ECB as well.

However, the short-term outlook suggests that the EUR/GBP is poised to move lower, which means the EURO will have the upper hand against the GBP. Once we get the first-rate cut from either bank (ECB or BoE), the situation could change and provide a new direction for the EUR/GBP.

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