The Pound and Euro should weaken substantially through early 2024 – Wells Fargo

Economists at Wells Fargo expect further weakness in the major European currencies. 

ECB and BoE have signaled that policy rates have likely reached their peak

Sentiment surveys for both economies have softened sharply in recent months, and European underperformance relative to the US should weigh on both currencies. 

The European Central Bank and Bank of England have also signaled that policy rates have likely reached their peak, thus lessening interest rate support for their respective currencies. 

We see a softer Pound and Euro through early 2024, targeting a low for Cable around 1.1600 and a low for EUR/USD around 1.0200.