EUR/USD surged to its strongest level in over six months at 1.0737 on Thursday. Nonetheless, economists at MUFG Bank expect the pair to struggle to see more gains from here.

Scope for further notable gains in EUR/GBP

“The worsening risk sentiment means EUR/USD is unlikely to shoot further higher from here. Gains for the Euro versus the higher-beta G10 currencies seems more likely. That would be consistent with market conditions turning more volatile which could be the key consequence of some of these central bank meetings this week.”

“Following the more cautious message on future rate hikes by the BoE we see scope for further notable gains in EUR/GBP. Higher EUR/GBP is also consistent with worsening risk sentiment and higher volatility when EUR tends to outperform GBP.”