📝Expect Softer GBP vs EUR And USD: Rabobank

The debt markets of Japan, France, the US and the UK have all been in the headlines in recent

months.

 Within this group, the UK has neither the largest debt/GDP ratio nor the most unstable

government, despite the resignation of the Deputy PM this week.

 Irrespective of this, we view the pound as particularly susceptible to jitters at the long end of

the curve. This is related to the UK’s current account deficit which can make the pound

particularly sensitive to bad news on the fiscal front.

 We continue to expect EUR/GBP to grind higher in the months ahead to 0.88 on a 3-to-6-month view and, in spite of today’s move lower in the USD, we see scope for cable to dip to GBP/USD1.33 on a 3-month view. - Rabobank