EUR/GBP alliance

The Euro, if it were a mountaineer, could be said to have strong
fingernails. While dear old Gordon Brown is enjoying the round of
mutual backslapping which always accompanies a Brit PM's first
forays into the backyard of a new White House incumbent, it behoves
us to remember that the UK, despite the protestations of some of its
more Nazi parliamentarians, is still closely tied to the commercial
goings-on in Western Europe. While the Euro has been up and down
in its other pairings like a bride's nightie, the EUR/GBP has in recent weeks
displayed what passes for stability in this market.

But the question becomes: How long can this last ?

The ECB, traditionally ascribed with feet of clay, have "come out" with
some hints that even they might like to join the money-printing game.
Certainly, it would do their three principal member states no great harm
to have an extra edge in trade outside the EU, stemming from a more
competitive Euro.

If the ECB do begin to go for it, when will it happen ?
And, will it happen before big traders start to dump shedloads of the
currency to take some profits ? EUR/GBP parity, as seen last Autumn,
was knee-jerk to the dreadful revelations of genuine ineptitude in the
Brit banking sector, not a reflection of a economically vibrant Europe.
Yet, we are still up there in the mid .9000's without a care in the world.

Why ?

It may just be that EUR/GBP is poised for falling out of the sky like a
DC3 with both engines on fire. If this happens, no major EUR pairing
will be immune to the fall-out.

What do others think ?

-
Chris