Sensible, flexible, stable: meet the GBP

MARKET VOICE

In the first few years of the euro's life, all the indications were that the EUR/GBP pair would follow in the path of GBP/DEM by demonstrating a marked propensity for high volatility and aggressive trends. In the 12 months following the formation of the euro, EUR/GBP fell by 16.5%; while between May 2002 and May 2003, the euro rallied by 18%. Historical volatility remained high throughout this period, with the one-month number often spiking above 10% and on one occasion in May 2000, almost

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