Gbpeur Target Mufg

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Gbpeur Target Mufg

Gbp/Eur To Reach 1.1240 Target - Mufg

MUFG has set a target of 1.240 for the GBP/EUR pair in the medium term. That's a bearish target given the current exchange rate of the GBP/EUR.

In the medium term, the 1.1400 level remains a very solid resistance level. Similarly, the 1.100 is also a very strong support level for the GBP/EUR pair.

Uk Gdp Data To Remain Weak

Overall, MUFG remains bearish on the Pound as they believe that lower yields will continue to send the currency lower. So in a sense, MUFG is bearish on the GBP against the EUR in the next few months.

The bank also added that the UK's GDP data will also remain weak in the next few quarters. With a weak economy and a struggling labor market, there are not enough reasons for GBP to stay strong.

As for the interest rates, MUFG commented that the Bank of England will continue with its rate cuts. This is also confirmed by the fact that the BoE governor also said that rate cuts will continue unless it has a negative shock to the inflation index.

So, as long as the inflation stays under control, the BoE will have no reason to roll back or stop its rate cut policy. This means the rate cuts will continue, which will further weaken the Pound Sterling.

Also, the UK government plans to move towards a tighter fiscal policy. So, that's something which will eventually ease the fears among the bond market participants.

But a tighter fiscal policy will hinder the growth of the UK economy. So, the end result will be a weaker GBP in the next few months.

However, fiscal tightening will make it easy for the Bank of England to continue with the rate cuts in the year 2026. So, the overall picture of GBP is very bearish against the USD, EUR, and other major currencies.

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