EUR/GBP has remained relatively stable this year despite the pickup in volatility in other currency pairs. Economists at Rabobank expect the pair to edge higher to 0.89 on a six-month view.

EUR/USD may again dip below parity next year if gas prices soar again

“Despite the possibility of a greater amount of policy tightening from the BoE vs. the ECB, the pound is vulnerable vs. the EUR given UK’s weakness in business confidence, investment and growth. The Pound is likely to be particularly susceptible if political drama increases again next year.”

“EUR/USD may again dip below parity next year if gas prices soar again. This, however, would provide no comfort for GBP.”

“We expect the process of peaking to be lengthy for the greenback with scope for potentially sizable dips for both EUR/USD and GBP/USD next year. For choice, we continue to expect a slow grind higher in the value of EUR/GBP to 0.89 on a six-month view.”