Libra sterling (GBP) has had a good performance in recent weeks. However, the cable bullish trend this year, the EUR/GBP has fallen from the maximum of the year about 0.8738 on April 11 A below 0.84, where it is currently finding a good support in the 200 -day simple mobile average about 0.8383. The enthusiasm for EUR in March can be explained by the strong market reaction to Germany’s decision to loosen its debt brake. This was widely seen as a ‘change of game’ for German medium -term growth, given defense spending and infrastructure projects that are expected to be unleashed, says Rabobank’s currency analyst Jane Foley.
The strength of the pound is tested before the review of the United Kingdom spending, the EUR support is maintained
“In contrast, March brought the spring declaration for the United Kingdom, which brought a reduction in half in the United Kingdom’s growth forecast of the OBR by 2025 and a blunt reminder of the tightrope that the Chancellor of the United Kingdom, Reeves, was walking to avoid violating its own fiscal rules. More recently, the United Kingdom has seen an avalanche of better news, which has helped elevate the libra. This, on June 11, the Foreign Minister will present her expenditure review, which could again highlight the difficult fiscal position of the United Kingdom. “
“While the concerns on this front can make the GBP bundles stop to think, the United Kingdom is clearly not the only country with a ‘too high’ debt load. In fact, the fact that the United Kingdom government at least recognizes the limitations of living above its possibilities should provide some tranquility to GBP investors. We hope that the EUR/GBP will remain close to 0.84 in the next 0.84 weeks.
“If the United Kingdom can continue its recent run of better news than expected, the simple mobile average of 200 days would be in danger. A break below could take the minimum of April near EUR/GBP 0.8323. That said, the revision of the expense will probably be uncomfortable for both the government and for investors. In addition, although the EUR could be due to a round of benefits after this year relatively better in Germany and the expectations of better growth in 2026 should provide long -term support for EUR. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
