EUR/GBP: Door open for a return to 0.85 – SocGen

EUR/GBP fell below the 0.86 level. Economists at Société Générale analyze the pair’s outlook.

EUR/GBP to rebound on fewer dissenters against BoE standing pat

The retracement in EUR/GBP below 0.86 marks a 2% drop from the November highs and opens the door for a return to 0.85 for the first time since early September.

The BoE is widely anticipated to keep rates on hold at 5.25% on Thursday but suspense will again revolve around the vote. Three MPC members backed a 25 bps rate increase in November. Fewer dissenters could cause positive momentum in Sterling to unravel and prompt a rebound in EUR/GBP.