UK Pound Drops Against Stronger Euro

UK pound is declining today, especially against the euro, as the latest news indicates that the eurozone is likely to avoid a recession. The pullback in the pound is not limited to its performance against the euro, though. The British currency is also down against the US dollar as Forex traders re-evaluate recent gains made by the pound.

UK pound is lower against the euro mainly due to the latest economic news out of Germany. Germany’s GDP single-handedly offset declines elsewhere in the eurozone and kept the 17-nation currency region out of recession. As a result, the UK pound, which has been gaining as a European safe haven, is no longer in demand. The euro is gaining, and the pound is lower.
The news has also affected the pound’s performance against other currencies. Sterling is lower against the US dollar, as well as losing ground against the Japanese yen. UK pound has been performing well in 2012, seeing an appreciation of 3.6 per cent. With this reality, it is little surprise that the pound is taking a bit of a breather. And, with the euro showing some strength, it isn’t surprising that the pound is falling out of favor.
At 12:36 GMT EUR/GBP is up to 0.8002 from the open at 0.7968. GBP/USD is lower at 1.6047, down from the open at 1.6092. GBP/JPY is down to 128.4100 from the open at 128.4850.

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