The euro recovered some of the ground it had lost against major currencies such as the US dollar and the British pound. The euro gained significant ground against the British pound as investors took a bearish approach towards the pound sterling due to fears of a hard Brexit.
The euro gained over 100 points against the sterling pound during today’s trading session as investors were bearish towards the pound. The euro also gained about 40 points against the US dollar boosted by weaker employment data and the uncertain outlook reported in the Fed minutes last week.
The euro’s bullish rally was not triggered by events within the eurozone, but by events in the USA and Great Britain. Theresa May, Britain’s Prime Minister, hinted at a hard Brexit as a means of protecting the UK’s sovereignty as opposed to prioritizing Britain’s access to the EU single market following the resignation of the UK’s EU ambassador.
The speculative sentiment in the market also indicates that most traders are favoring a short position against the US dollar based on the uncertain Fed outlook.
The euro’s stability is likely to be tested in the coming weeks as fears of a France exit from the European Union are likely to influence overall market sentiment.
The EUR/GBP currency pair was trading at 0.8689 as at 17:05 GMT having opened trading at 0.8588. The EUR/USD pair was trading at 1.0571 having opened trading at 1.0528.
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