Real interest rates may also fall as a consequence and this is important as four of the seventeen nations are seeing negative inflation rates, which is creating positive real interest rates.
EUR/GBP has fallen as a result, hitting a low of 0.8330, but has found reasonable buyers here.
If we look at EUR/USD and GBP/USD, both pairs are at a very interesting juncture, with EUR/USD testing the 2008 downtrend, while a break of 1.6605 on cable would be a bearish development. It seems likely that falls in either of these pairs will have ramifications on EUR/GBP.
Strong upside seems tough given the currency fighting language from the ECB, however I still favour upside in the pair over the coming weeks, although around 0.8500 to 0.8600 becomes a good longer-term selling opportunity.