EUR/GBP is the ticker used to represent the Euro and British Pound currency pair on forex markets. The EUR/GBP chart shows traders how many British Pounds are needed to buy a single Euro. It is one of the most actively traded currency pairs in the world because it marries two significant European economies: the European Union (EU) and the United Kingdom (UK). The demand for the currency pair makes it important for traders to understand the live chart and what can impact the Euro-Sterling rate.
EUR is the three-letter code used to describe the Euro, the currency of the European Union (EU), although it has only been adopted by 19 of the EU’s 28-member states so far. GBP represents the Pound Sterling – the currency of the United Kingdom, as well as UK Crown Dependencies like the Isle of Man and the Channel Islands.
The EUR/GBP pair combines two of the most frequently traded currencies in the world – the Euro is second only to the US Dollar (USD). In fact, both the Euro and the British Pound are considered ‘majors’.
EUR/GBP is commonly known as Euro-Sterling, or occasionally by its nickname, ‘Chunnel’, in reference to the channel tunnel that connects the UK to the rest of Europe.
The EUR/GBP pair is considered a young currency pairing because it only began trading on 1 January 1999, when the Euro was created. While the UK remained part of the European Union, it opted out of using the EU currency and remained under the control of the Bank of England (BoE).
During the 2008 global financial crisis, the BoE was more active in cutting rates than the European Central Bank (ECB), which caused the Euro to strengthen against the Pound. Historically, the exchange rate had remained in the 0.6100 to 0.7000 range, but the recession caused the pair to trade as close to parity as the markets have ever seen – reaching 0.9600 in January 2009.
The EUR/GBP rate entered another period of uncertainty after the UK voted to leave the EU in June 2016, in what became known as ‘Brexit’. The political relationship between the two economies began to fracture and the EUR/GBP pair experienced considerable volatility.
A number of factors can influence the EUR/GBP forecast, including:
Traders should remain up to date with any announcements and data releases that could move the real-time price of EUR/GBP. For live analysis, view our EUR/GBP news and technical analysis articles below.
The economies of the UK and EU are intertwined due to the large amounts of capital exchanged between them daily. This has kept the Euro-Sterling rate relatively stable and made the pair a popular hedge against global instability.
However, recent events have caused EUR/GBP to become increasingly volatile, which creates opportunities for traders to profit from price movements.
Although the British Pound is a major global currency, it’s not as liquid as the Euro. This means that in periods of increased interest, such as around the Brexit referendum, prices can change very quickly.
EUR/GBP is one of the most popular currencies on the forex market, so it is important to know how to read the EUR/GBP live chart.
In the Euro-Sterling pair, the Euro is the base currency or the currency that you are buying, while the Pound is the quote currency, or the currency being sold. EUR/GBP shows traders how many Pounds are required to purchase a single Euro. So, if the price of the pair is 0.8900, this means that it costs £0.89 to buy €1.
When you see the price increasing on the chart, it could mean one of three things. It could mean that the Euro is strengthening, that the Pound is weakening, or that both are happening simultaneously. Some traders will apply various forms of technical analysis to their charts to make EUR/GBP forecasts. Whether you look at price patterns or fundamental news events, the chart can give you a sense of current trends.
Spot GBPUSD sits at major confluence and multi-year Fib support but could be strong-armed by its overarching downtrend. Meanwhile, spot EURGBP upward momentum appears to be waning.
by Rich Dvorak