Dutch International: Limited Upside Potential for Pound/Euro

Analyst Chris Turner of the Netherlands International Group stated in a report that the potential for the British pound to appreciate against the Euro is limited, as the threshold for the Bank of England to raise interest rates, as expected by the market, is exceptionally high. He pointed out that even after the market lowered expectations of a rate hike by the Bank of England on Monday, the exchange rate of the British pound against the Euro remained quite strong. This rate adjustment occurred after Trump announced a five-day delay in military strikes on Iran's energy infrastructure. However, data from LSEG shows that the 1-month risk reversal for the Euro against the British pound indicates that the preference for bullish options remains high. The Netherlands International Group predicts that the decline of the Euro against the British pound will be limited to around 0.8600.