World Currency Watch with ForexGen

Monday, July 7, 2008

The ECB’s and BOE’s rate decisions puts more wind to the back of EUR/GBP!


The Eurozone and the U.K. economies continue to diverge.

For years and years, these two economies followed each other up and down in “lock step”. Then the credit/sub-prime crisis hit. This pushed the U.K. economy lower as they experienced the same things that America experienced: Hedge fund blow ups, banks struggling, housing prices falling, etc.

On the other hand, many other European banks didn’t have as much exposure to “sub-prime” as did the “financial epicenter”, the U.K.

So as these economies “de-linked” and continue to diverge, it’s produced a heck of an uptrend in the EUR/GBP pair. Click on the chart to enlarge it below.

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