Sterling has fallen to its lowest level against the single currency since September 2017 having fallen to a low of 1.1150/0.8969 and bring the pounds losses to over 2.2% in the last week.
Sterling’s losses were felt as it would appear the EU will refuses the UK’s service sector access to the continent. In a speech from Chancellor Philip Hammond he told European leaders that it is in “mutual interest” of both the UK and EU to include financial services in a free trade agreements saying it is possible to reach a deal, however following this EU president Donald Tusk flat out rejected the proposals.
This caused a significant sell off for the pound with many analysts suggesting this could just be the start, a sobering thought for anyone looking to buy Euros.
What could impact the pound for the rest of the week?
Moving away from the on-going Brexit saga, other areas to focus for those looking at GBP/EUR will include the European Central Bank (ECB) interest rate decision and accompanying statement at 12:45 and 13:30 respectively. No movement is expected in the base rate but look out for any clues as to future monetary policy from Mario Draghi, the head of the ECB.
Looking to Friday and this is set to be the busiest day data wise for sterling. At 09:30 we will see both industrial and manufacturing production figures, a key insight as to the health of the UK economy and dependent on the outcome can cause some significant movement for the pound.