Euro Dips Against Pound as Oil Prices Soar

The Euro has dipped further against the British Pound, weighed down by higher oil prices and ongoing tensions in the Middle East. The EUR/GBP pair tested Friday's lows at 0.8560, as Brent oil prices returned to levels near $83.00.

Analysts at Rabobank see 'a re-pricing in policy expectations towards steady policy from the BoE this year combined with the prospect of nervousness ahead of the October budget suggests scope for downside pressure on the pound.'

Rabobank prefers buying EUR/GBP on dips to the 0.8550 area, and expects a break above the recent high in the 0.8588 region could increase upside potential.