EUR/GBP: Potential for a corrective rebound - ING
EUR/GBP Poised for a Potential Rebound
Francesco Pesole from ING highlights that EUR/GBP has slipped by approximately 1.5% since tensions involving Iran escalated, a trend supported by a stronger British pound and robust stock markets. Despite this, Pesole believes the recent decline appears overdone when assessed by short-term valuation indicators. With oil prices now dipping below $90, he anticipates a corrective move upward toward 0.870, rather than a continued slide to 0.860.
Recent Decline May Be Overextended
According to Pesole, the EUR/GBP pair remains under pressure, having lost about 1.5% since the onset of the Iranian crisis. This weakness is attributed to a more aggressive repricing of UK interest rates and the ongoing strength in equities, which has limited the typical shift from the pound to the euro.
However, he points out that the downward momentum now seems excessive based on their short-term models. The recent drop in oil prices below $90 could lead to a softer outlook for UK rates, potentially triggering a rebound in EUR/GBP. Pesole maintains a preference for a recovery toward 0.870, rather than expecting further losses to 0.860.
(This report was produced with AI assistance and reviewed by editorial staff.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Anthropic Adds 2 Sentences to Claude Code to Stop AI Video Game Clones
Ripple Partner Reaches One Million People With Safe Water
NASDAQ TRADE HALT CONTINUES <UCFIW.O> REASON NOT AVAILABLE AT 03:58 AM
VIPCross-Asset Positioning Amid AI Earnings Scrutiny and the US Election
1. Markets diverged during the week. Between the October 23 and October 30 closes, BTC fell 4.78%, the Nasdaq 100 declined 1.98%, and gold and silver dropped 2.72% and 8.59%, respectively. The DAX, KOSPI, Nikkei 225 and Hang Seng advanced. We focus on differences in growth prospects, valuation sensitivity and risk exposures rather than applying a single directional view across assets. 2. Market reactions to Alphabet's and Intel's earnings brought returns on AI investment into focus. Attention is shifting from the scale of capital expenditure to revenue realization, margins and free cash flow. Lower interest rates can ease discount-rate pressure, but a sustained valuation recovery still requires support from both operating performance and financing conditions. 3. The November 3 US midterm elections and November 6 employment report are key events in the coming week. We monitor how post-election fiscal and legislative agendas may affect interest rates, the dollar and industry operating conditions. Our execution priorities are to manage leverage and concentration, retain margin and exit-liquidity buffers, and avoid treating a single political outcome as an automatic trading signal. 4. Following Binance's disclosure of a security incident, industry attention to endpoint protection, access segregation and coordinated incident response has increased. Key assets to monitor: BTC, the Nasdaq 100, crude oil and gold, alongside upcoming earnings from AAPL, AMD, PLTR, ARM, ANET and QCOM.
Crypto prices
More
