EUR/GBP: Greek Debt Deal Uncertainties Hurt the Euro, Favor the Pound

In the previous European trading session, the Euro won versus the Great British pound as hopes over a Greek debt deal turned to doubts, prompting investors to sell the former in favor of the latter. In the UK, the GDP economic release confirmed that Britain exited a double dip recession in the third quarter, in turn increasing demand for Sterling. In today’s European exchanges, the EURGBP pair is seen to wane as questions rise whether or not Greece’s debt programme would be sustainable in the future.

Investor-sentiment was initially buoyed by an agreement over Greece’s debt by the European leaders, but the lack of details as to the implementation of measures and reforms needed to attain new targets set by the Euro Zone leaders and the International Monetary Fund (IMF), led to markets being skeptical to continue buying the single currency. Also, Greece has still to secure the approval of other member states, including Germany, as to the release of the next tranche of bailout funds. German Finance Minister Wolfgang Schaeuble said on Tuesday, “We need parliamentary approval in a bunch of member states including Germany and we’ll send a bill to the Bundestag (lower house) for approval”, he said to reporters. The approval is expected to be within the week, but something that could add to the growing uncertainties is surely to weigh on the shared currency versus its peers.

Meanwhile, the Sterling is seen to benefit amidst uncertainties as it is seen as a better alternative than the Euro. As questions rise as to the sustainability of the Greek debt program, the situation is likely to favor the Pound. The release of the Revised GDP data confirming the 0.1 percent growth posted by Britain’s economy in the third quarter, is also another factor that is seen to extend support to the Sterling. Thus, a short position for the EURGBP pair is deemed a better choice in today‚Äôs European session.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.