British Pound Gains vs. Euro, Drops vs. Dollar & Yen

The Great Britain pound gained versus the euro on the speculation that Ireland would fail to find means for decreasing its budget shortfall even though it discusses with the European Union the possible measures to do so. The pound dropped against the US dollar and the Japanese yen.
Ireland attempts to negotiate with the EU the way to avoid the bailout, like the one provided for Greece, while the investors refrain from buying the Irish bonds. Angela Merkel, the Chancellor of Germany, said last week that the European bondholders should share the cost of any restructuring. Olli Rehn, the European Commissioner for Economic and Financial Affairs, meets Ireland’s policy makers to discuss the spending cuts and the tax increases.
The previous strength of the euro against the sterling has possibly came from the expectation of the quantitative easing by the Bank of England, which hasn’t happen, making the speculators to get out of the long positions on the EUR/GBP currency pair. This currency pair in the near future will likely be dependent largely on the news from the European Union.
GBP/USD traded at 1.6076 as of 00:26 GMT after opening at 1.6139. EUR/GBP traded near 0.8619 after it fell yesterday from 0.8680 to 0.8623. GBP/JPY went down from 130.99 to 130.55, following the decline to 130.34.

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