EUR/GBP: Euro Sustained by ECB, Greek Hopes

The Euro lost against the British pound before the release of Euro Zone’s manufacturing and services data, led by Germany and France’s PMI figures. Nevertheless, the single currency is expected to erase losses versus the Pound on better news in Greece, while the Sterling is projected to decline pending the Revised GDP data which is expected to reveal that the UK economy contracted less than the initial estimate in the second quarter of this year.

Eurogroup Chief Jean-Claude Juncker met with Greek Prime Minister Antonis Samaras yesterday to discuss Greek’s debt problems, with a positive turnout. Juncker was said to have given support to the Greek government as it pursues to get the economy back on track, and all the same gave a friendly warning of the country’s last chance to remain a member of the Euro Zone. He also had good words for the efforts of the government to take on measures to reduce its deficit, and expressed confidence that the officials would be able to steer the country back on track.

Meanwhile, European Union’s Economic and Monetary Affairs Commissioner Olli Rehn’s statement that the EU and the ECB stand ready to act on the debt crisis in the event conditions are met, is also seen to give a boost to the Euro. Rehn was reported to have said that the ECB has a central role in ensuring the stability of the Euro Zone’s financial system.

Regarding events in the UK, BOE member Adam Posen, as reported in Bloomberg, said in an interview broadcast on BBC’s Hardtalk program that Britain is “in a state of poor growth, stagnation. Myself and other external members of the committee have suggested we should be buying things other than just gilts,” he added.

With the foregoing factors, a buy bias for the EURGBP pair is deemed preferable in today’s European trades.

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