Type: Currency | Group: Majors | Base: Euro | Quote: US Dollar | Spread: 0.02 – 3.2 pips
The euro British pound (EUR GBP) is a currency pairing whereby the euro and the pound can be traded against each other. The EUR GBP can be thought of as the euro versus the pound – you short the euro and go long the pound or go long the euro and short the pound. The EUR GBP is one of the most traded currency pairs and also one of the most stable.
EUR GBP is also written as EUR/GBP.
The main European and British economies are heavily intertwined, so the EUR GBP pair tends to be stable as far as its range. Basically, large amounts of capital flow between the pound and the euro in the form of currency and investment on a daily basis and provide a volume cushion that keeps volatility relatively low. That said, the European sovereign debt crisis has shown that the EUR GBP can see sharp movement in the right economic environment.
EUR/GBP Important Levels
*This Block Under Construction
|Update: October 21, 2021|
Higher Zone: 1.1662 – 1.1669 | Lower Zone: 1.1616 – 1.1624
The euro made its debut on January 1, 1999. It originally functioned as a reserve currency for all of Europe as the various nations took their time phasing out their national currencies. Some member nations still have a national currency in addition to accepting the euro, but even these are pegged to the euro.
For the first few years of trading, the euro was very stable and appreciated against many older currencies. The difficulties of coordinating a single currency over a network of very different countries caught up to the euro in 2010, as a Greek sovereign debt crisis drew attention to the very different political and fiscal natures of the member nations. The Greek debt crisis and similar problems in other member nations lead to the euro becoming a much more volatile currency.
The European Central Bank (ECB) coordinates with the central banks of the member nations through the European System of Central Banks (ESCB) to make decision affecting the euro and the member nations (known as the Eurozone). Taken collectively, the Eurozone is larger than the U.S. economy.
About British Pound Sterling
The British pound sterling (GBP) is the official currency used in the United Kingdom. The pound sterling is considered to be one of the major currencies and is paired with all the other major currencies, including the U.S. dollar (USD), Japanese yen (JPY), Swiss franc (CHF), euro (EUR), Australian dollar (AUD) and Canadian dollar (CAD). It also acts as a base currency for many less commonly traded and exotic currencies.
The United Kingdom is one of the world’s largest economies. Although it is a member of the European Union (EU), the UK has chosen to keep the pound sterling as its currency. The economy of the UK is very similar to the U.S. in that services play a larger role than commodities.
The pound sterling had the unfortunate role of being the target currency of the greatest currency trade in history. On September 16, 1992, currency speculators lead by George Soros forced the British government to pull out of the European Exchange Rate Mechanism (ERM) – a precursor to the EU and euro. Soros made over $1 billion on the trade and went down in history as the man who broke the Bank of England.
Since then, the pound sterling has struggled with stability due to debt issues that have plagued many EU members.
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BOE Governor Bailey speaks on Thursday at 17:00 MT time. Instruments to trade: EUR/GBP, GBP/USD, GBP/CAD, GBP/CHF The Bank of