EUR/GBP: Progress in the Euro Zone Lifts the Single Currency

The meeting of the Eurogroup officials last week raised hopes that Spain would be asking for financial aid soon, giving rise to the incline of the Euro versus the Great British pound in the previous European trading session. Meanwhile, European Central Bank President Mario Draghi’s statement that there is a case for optimism in Europe after markets rallied on the announcement of the bond-purchase program of the central bank, also supported the single currency. In today’s European exchanges, the shared currency is seen to extend gains versus the Sterling in today’s European session.

At the meeting last week, Eurogroup Head Jean-Claude Juncker and European Commissioner for Economic and Monetary Affairs Olli Rehn disclosed that Spain is already preparing to present a new economic reform program, generating thoughts that the country is getting ready to apply for financial aid. Also seen to boost the shared currency are indications that Greece could be given more time to comply with its targets. Juncker told reporters that they could exclude the idea of Greece’s departure from the Euro Zone. International Monetary Fund Director Christine Lagarde likewise gave the same idea when she said that they could examine more time for Greece as the indebted country already showed a great effort in getting the economy back on track, but stressed that it must continue with the economic reforms.

Meanwhile, the Pound is seen to be driven down by the decline in house prices for a third month in a row as buyers stayed at home to watch the Olympics. According to Miles Shipside, Commercial Director of Rightmove, “summer sellers have had some very stiff competition, not only from competing sellers shopping their prices but also from the Olympics extravaganza which has been more compelling for many than viewing property.” With positive developments in the Euro Zone, a long position for the EUR/GBP pair is recommended in today‚Äôs European trades.

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