EUR/GBP rises half a percent, more from GBP weakness more than EUR strength

EUR/GBP rallies back up to the 50-day SMA in the mid 0.8300s. 

The Pound is depreciating on doubts about the robustness of the UK economy. 

The Euro itself has problems, however, after another poor set of poor figures from Germany.  

EUR/GBP trades back up to the level of the 50-day Simple Moving Average (SMA) at around 0.8350 on Monday, but more as a result of Pound Sterling (GBP) weakness than Euro strength. 

The pair is safely back inside its medium-term range between roughly 0.8300 and 0.8450 as downside risks pressure both currencies lower, resulting in a lack of overall volatility and a range-bound market structure. That said, the pair is at over two-year lows, suggesting the possibility the Euro may be under valued and, perhaps, due a bounce. 

The German IFO Business Climate survey out on Monday, however, was not going to provide a catalyst for such a rebound. Based on over 9,000 responses in key sectors such as manufacturing, services, construction and trade, it showed a continuation of the theme of the German economy being stuck in a phase of decline. 

The IFO Current Assessment index fell to 84.3 in November from 85.7 in October and below the 85.4 forecast. It was a similar story with the Business Climate index which also fell from the previous month and fell below expectations. The Expectations index, meanwhile, came out at 87.2, above the 87.0 forecast but below the 87.3 previous.  Overall the data painted a negative picture of Europe’s largest economy.