The Great Britain pound weakened against the euro today as Forex traders were hoping that the European crisis can be resolved and such hopes diminished appeal of the sterling as a haven against Europe’s troubles. The UK currency also fell versus the US dollar, erasing its previous gains.
Market participants were looking more favorably at the euro after Greece has received another portion of the bailout package. Yields on bonds of European countries were falling, easing debt pressure on Europe’s economies. The euro outperformed the pound in such conditions as the UK currency was no longer needed as a refuge against the crisis. At the same time, the dollar also has lost its safe haven appeal, allowing the sterling to gain on the US currency temporary.
EUR/GBP rose from 0.8089 to 0.8099 as of 12:51 GMT today. GBP/USD was down from 1.6038 to 1.6025 after it rallied to 1.6061 earlier.
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