The euro gained momentum against the British pound on Wednesday as traders favored the common currency following Germany’s announcement of a massive infrastructure investment and debt rule reforms aimed at boosting economic growth.
Euro Surges Against the Pound
The euro climbed 0.4% against the pound, reaching 83.35 pence, its highest level in a week, marking a three-day winning streak. This rally came after Germany’s coalition parties unveiled a €500 billion infrastructure fund focused on military and infrastructure expansion.
Impact on Global Currency Markets
Germany’s financial overhaul also bolstered European currencies against the U.S. dollar. Despite the euro’s dominance, the British pound still gained 0.25% against the dollar, hitting $1.28265, its strongest level since November 12.
Analysts Recommend Buying Euro Over Pound
Experts at Westpac suggested that investors buy the euro against the pound, citing aggressive defense spending across Europe.
“European leaders are significantly increasing defense budgets, and while the UK is also investing, its fiscal position remains under pressure due to austerity measures and market constraints,” analysts at Westpac noted.
