Pound to euro exchange rate: Sterling 'climbs back' - but could continue to struggle
THE POUND is currently trading against the euro at £1.124, having recovered from last week’s lows. It could continue to struggle in light of an economic ‘short supply’ in data and the uncertainty of Brexit negotiations.
The pound has recovered against the euro after reaching disastrous lows last week.
It is currently trading at £1.124 as of 7:20am this morning, following lows of £1.118 last week.
Uncertainty surrounding Brexit and the proposals currently being lined up for the UK to leave in 2019 has had a knock-on effect on the exchange rate.
With the UK and the EU still struggling with a number of issues, the pound is expected to fluctuate further this week.
UK consumer spending has also struggled, with weak figures to start the year and is the lowest since 2012
UK consumer spending has also struggled, with weak figures to start the year and is the lowest since 2012.
A report by Visa found that Britons have tightened their belts substantially, with the first quarter of 2018 expected to be the “worst on record”.
This hasn’t been helped by a fall in high street spending, and the number of people hitting the streets down by 0.5 per cent.
Annabel Fiddes, an economist at IHS Markit, who compiled the data for Visa, commented: “Rising living costs, lacklustre wage growth and relatively subdued consumer confidence are all likely playing a part in the ongoing reduction in household spending.”
The colder weather, as well as 5-year-high inflation rates, are thought to have contributed to the fall.
For the rest of the week, the pound has a chance to recover, as European Central Bank (ECB) President Mario Draghi is expected to speak on Wednesday in Frankfurt.
The discussion around Brexit could affect the pound later this week as discussions ramp up, with just over a year until the UK is due to leave.
Recent news has found that Ryanair could insert a “Brexit clause” to flight tickets in case aviation regulations are not settled upon.
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Laura Parsons, currency analyst at TorFx, commented on the pounds movement.
She revealed: “The GBP/EUR exchange rate has clawed its way back from last week’s worst levels, but Sterling may struggle to exert itself over the next few days with economic data for the U.K. in seriously short supply."
However, it could be affected by talks later this week, as well as any new Brexit announcements.
Ms Parsons explained: “Aside from Brexit developments, the main influencers on the GBP/EUR exchange rate are likely to be Eurozone inflation data and a speech from European Central Bank (ECB) President Mario Draghi.”