Euro/British Pound
As those same spreads widen, now euros are borrowed and paid back in British pounds. This is a buy euro/British pound situation. As spreads narrow, sell euro/British pound because business will be conducted instead in British pound/U.S. dollar, the premier currency pair that will earn more British pounds for the UK. euro/British pound in this instance is the funding pair, and performed as expected when these pairs were introduced in the latter part of the 1990s. It was meant to facilitate finance across borders when cost became too high in the premier currency pairs.
In terms of U.K. trading, euro/British pound will always move counter to British pound/U.S. dollar. If gilt prices and the stock market rise, euro/British pound ...
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