The ECB's and BOE's rate decisions puts more wind to the back of EUR/GBP!

The Eurozone and the U.K. economies continue to diverge.

For years and years, these two economies followed each other up and down in "lock step". Then the credit/sub-prime crisis hit. This pushed the U.K. economy lower as they experienced the same things that America experienced: Hedge fund blow ups, banks struggling, housing prices falling, etc.

On the other hand, many other European banks didn't have as much exposure to "sub-prime" as did the "financial epicenter", the U.K.

So as these economies "de-linked" and continue to diverge, it's produced a heck of an uptrend in the EUR/GBP pair. Click on the chart to enlarge it below.

Houston, we have lift off! The divergence in these two economies is producing a tremendous trend!

This trend will likely continue since the Bank of England (BOE) cut rates today by 25 basis points while the ECB kept rates unchanged in the Eurozone.

So until the ECB actually cuts rates (which will probably come about later on this year), this trend will most likely remain intact.

Sean Hyman
Currency Director
The Sovereign Society