After a pretty poor few weeks for GBP/EUR rates that saw the pair drop to 3 year lows of €1.1480, yesterday saw a slight recovery. It wasn't anything to do with Sterling, as the Pound remains weak on concerns over 'Brexit'. The reason for the gain was a weakening of the single currency due to concerns over the health of Deutsche Bank. Here's how GBP/EUR has moved over the last 24 hours:
As you can see the rate climbed steadily throughout the day before levelling off around the €1.16 mark. There was a general feeling of unease about the banking sector in the EU that weakened the Euro and made it cheaper to buy. Shares in Deutsche Bank plummeted after a demand from the US that it provides $14bn as it mis-sold products. Conspiracy theorists will love this as it comes just a few weeks after the EU asked the US company apple to pay $14bn, and now the US is asking an EU company for the same amount! It does highlight concerns over the health of the EU banking sector however, and that's why the Euro weakened pushing GBP/EUR rates higher.
Anyone looking to place a trade today should be keeping an eye on the ECB president giving a speech at 3.30pm today. The markets will be looking for any comments about the economy and hints at future monetary policy. If what he says is deemed negative, the Euro could weaken further.
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