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The EUR/GBP pair represents the relationship between the two key European currencies: the Eurozone’s euro and the British pound. The EUR/GBP chart shows how many British pounds — which is the quote currency — are needed to buy one euro — the base currency.
Both the GBP and the EUR are included in the list of four most traded currencies in the world, making the EUR/GBP one of the most popular cross-currency pairs in the foreign exchange market.
A high volume of continuous trade combined with excellent liquidity results in the reduced bid and ask price differences. Therefore, the popularity of this forex pair ensures that it trades at a tight spread.
According to the historical euro/British pound chart, the pair reached a record low of 0.585 in October 2000 and a record high of 0.958 in December 2008.
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The EUR/GBP is an example of what is known as a cross-currency pairing. This means that the pair is traded directly, without being first converted into the US dollar. In recent years this type of forex pair has attracted many international traders. The opportunity to exchange euros directly for British pounds offers protection from any volatility associated with the US dollar.
As it represents two of the world’s most influential economies, the European Union and the United Kingdom, the EUR/GBP pair has a very strong position in the forex arena. Its great liquidity and moderate volatility boost the EUR/GBP trade volumes and make the pair attractive to all types of traders, newcomers and professionals alike. In 2019, its transactions made up 2 per cent of daily trades, making it the ninth most-traded currency pair in the market.
Throughout its history, the EUR/GBP pair has witnessed a lot of volatility, characterised by multiple price fluctuations.
The pair started trading in 1999 at a rate of 0.7. Over the next few months, the EUR had fallen against the GBP dramatically, with the pair’s rate dropping as low as 0.585 in October 2000. However, the Eurozone’s currency then quickly gained upside momentum, reaching 0.723 by May 2003. For the next few years, the EUR/GBP chart remained rather flat.
In 2007, the pair entered a bearish trend, skyrocketing to 0.958 by December 2008. However, the uplift was short-lived: another sharp decline happened once the Great Recession hit the global financial markets.
In mid-2015, the EUR/GBP rate started to recover from the crisis, climbing back to 0.9 in October 2016. Since then, this currency pairing has fluctuated in price quite unpredictably, primarily due to the uncertainty surrounding Brexit.
When trading the euro to pound forex pair, it is recommended to pay attention to economic releases and changes in monetary policy made by the institutions in control – the European Central Bank and the Bank of England. In addition, it is important to consider major economic changes in the UK and the EU, including GDP figures, import/export data, employment statistics and inflation rates.
Explore the EUR/GBP forex chart at Capital.com to keep track of the euro to pound rate changes in real-time.