In the previous European trading session, the Euro gained versus the British pound aided by expectations that the European Central Bank would reveal clear steps in addressing the debt crisis at its policy meeting to be held this week. On the other hand, the UK ceded to the single currency as the government is being urged to act decisively to trigger growth in the ailing economy. In today’s European trades, the EURGBP pair is expected to rise.
This coming September 6, the ECB officials are set to meet, and the shared currency continues to draw support from hopes that the central bank would step up its efforts to revive the European economy. ECB President Mario Draghi opted not to attend the Jackson Hole Symposium last week to lay down the details of possible strategies that the central bank would implement to effectively deal with the debt crisis. Spanish Prime Minister Mariano Rajoy told Spain’s ABC, Germany’s Bild am Sonntag, France’s Le Journal du Dimanche and Italy’s Corriere della Seta in a joint interview published over the weekend that an announcement by Draghi of intervention in the bond markets shows the robust will of the ECB to solve the problem. Whether the central bank would be ready to act is something markets look forward to this week.
In the UK, the Confederation of British Industry and the British Chambers of Commerce called on the government last week and urged it to act to trigger growth in the struggling economy as they project further contraction this year. Taking into consideration all these factors, a long position for the EUR/GBP pair is recommended in today’s European exchanges.
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