Danske Research discusses EUR/GBP outlook and flags a scope for further upside pressure in the near-term.
"EUR/GBP leaped yesterday to just below 0.90. In our view, another extension adds further upside pressure as 1) the economy remains challenged, 2) the BoE is more dovish and 3) an election would add political risk that has not yet been priced.
In turn, the risk is probably shifting towards the idea that our short-term forecast of 0.90 is on the optimistic side," Danske notes.
"In essence, political uncertainty is only part of what makes the GBP weak – it is increasingly so also warranted by the negative drift in economic fundamentals," Danske adds.