EUR/GBP dropped to a new low of 0.7780 following the crash of the euro. The cross further extended its drops and is now only around 30 pips away from the low of 0.7750 seen in July 2012.
A break below this level will be the lowest since 2008 and it’s not that far away.
Weak inflation data in the euro-zone was the straw the broke the camel’s back. Inflation fell to the lowest cycle low of 0.3% and core inflation to 0.7%. EUR/USD confirmed the break and fell below support at 1.2660 and went all the way to 1.2614.
Earlier in the UK, growth data was upgraded to 0.9% in Q2, and despite a worse than expected current account deficit, the pound remained relatively strong against the dollar and stronger against the euro.
GBP/EUR is at the highs around 1.2850 and this is very relevant for United Kingdom nationals living in the continent.
British expats in countries such as Spain and France can put a smile on their faces as their pounds now buy more euros and allow them a more comfortable lifestyle under the sunny skies of these countries.
Here is how it looks on the chart:
The divergence between the UK and the euro-zone is clear, and the gap is now better reflected in the exchange rate.
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