British Pound: Euro weakness drives Sterling gains - MUFG

Lee Hardman at MUFG highlights that the Pound has rallied sharply against the Euro as Euro-zone fiscal concerns intensify, driving EUR/GBP to fresh year-to-date lows. While UK fiscal risks are present, they are seen as less acute than in France, and expectations for a Bank of England rate hike in November help to limit downside risks for the Pound.

EUR/GBP hits fresh year-to-date low as fiscal concerns mount

"Negative development in the euro-zone have boosted the relative appeal of the pound."

"The pound has strengthened sharply against the euro since the end of last month as the euro sell-off has broadened out."

"It has resulted in EUR/GBP falling from just above the 0.8600 to a fresh year-to-date low yesterday of 0.8448."

"Media reports have suggested that the Labour government is well aware of challenging global bond market conditions ahead of this month’s budget scheduled for 28th October which is encouraging them to play it safe as they seek to limit the risk of negative market reaction."

"A development that would help to ease downside risks for the pound."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)