Euro/British Pound and Yield Curve
Euro/British pound satisfies the same scenario as Australian dollar/New Zealand dollar. As euro/U.S. dollar and British pound/U.S. dollar seek their yield from U.S. bonds and Bills in U.S. trading, euro/British pound as the U.S. dollar pair follows U.S. Bond prices.
Euro/British pound and Australian dollar/New Zealand dollar are the safe trades in U.S. trading as they like the safety backing of U.S. Bonds. In European trading, the opposite scenario holds.
Euro/British pound loves yields while euro/U.S. dollar likes bund yields and British pound/U.S. dollar likes the safety of the bond price. This says that U.S. dollars seek yields in Europe through euro/British pound. Yet euro/British pound is the finance mechanism ...
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