Pound to euro exchange rate: Sterling falters after EU negotiator’s Brexit warning
POUND sterling has slipped against the euro after EU’s chief Brexit negotiator warned not enough progress is being made in talks between Britain and the bloc.
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The exchange rate has dipped to €1.128 down from €1.132 yesterday.
Sterling is struggling in response to disappointing data out of the UK, and criticism over Brexit negotiations.
Yesterday the pound fell after the worst construction results since immediately after the Brexit vote.
Building output contracted in September with a Markit/CIPS construction PMI reading of 48.1 - a figure below 50 indicates the sector is shrinking.
Pound euro exchange rate: Sterling has dipped after a warning from the EU over Brexit
Another disappointing UK report sent the pound lower against the euro
TorFX currency analyst Laura Parsons said: “Another disappointing UK report sent the pound lower still against the euro on Tuesday.
“The UK’s construction sector was shown to have unexpectedly entered contraction territory last month and the news added to concerns that UK economic output slowed in the third quarter.”
Speaking about Brexit talks thus far, Mr Barnier said: “Today we have not yet achieved sufficient progress to begin in full confidence the second phase of negotiations.
Pound euro exchange rate: Sterling is buying €1.128
"There are still serious divergences, in particular on the financial settlement.
“We will not agree to pay at 27 [EU members] what was decided at 28.”
Fresh data out of the UK could send the exchange rate either way.
If today’s services figures fail to meet expectations, the euro will likely climb.
Pound euro exchange rate: Sterling remains volatile to Brexit talks
Ms Parsons said: “GBP/EUR is currently trading in the region of €1.127 and could fall even further if today’s all-important UK services PMI comes in below forecast.”
Sterling was hit earlier this week by disappointing manufacturing data.
The PMI proved poor, fueling concerns about the UK’s growth prospects.
Activity in Britain’s factory sector tumbled in September, with the manufacturing index sliding from 56.9 to 55.9.