Pound V euro: GBP close to seven-year low against EUR

This poor performance comes after unsettling UK retail sales figures, as well as scepticism about government plans to solve key Brexit issues.

Yesterday, UK retail sales growth was shown to have slowed in July, but not by as much as forecast. 

The report had a mixed reception from economists – some saw it as confirmation that consumer spending is struggling, while others interpreted it as a sign of UK resilience.

In terms of the latest Brexit news, a recent paper has detailed plans for a ‘frictionless’ border between Northern Ireland and Ireland. The plan is to avoid a return to the past, where border crossings had a heavy military presence at the height of The Troubles.

This has been met with scepticism from across the political spectrum, with Taoiseach Leo Varadkar warning that: “What we’re not going to do is to design a border for the Brexiteers because they’re the ones who want a border.”

Shadow Secretary of State Owen Smith has made additional criticisms.

He said: “The government say they want trade across the Irish border to be frictionless and seamless, but actually they look clueless as to how they’re going to achieve that.”

Today’s EUR/GBP exchange rate rise has been caused by a forecast-beating jump in Eurozone construction.

Annual construction in June had been expected to fall to 2.5 per cent, but instead posted a much higher 3.4 per cent.

As well as representing healthy economic activity across the Eurozone, this news also suggests that the Eurozone-wide construction PMI could rise in the future.

Looking ahead to the coming week, the pound to euro exchange rate is likely to experience fluctuations. 

High-impact data is due from the UK and Eurozone, but forecasts have been for negative results in a number of cases.

The key UK news will be government borrowing figures on Monday, followed by GDP stats on Thursday. 

The initial borrowing data could trigger a pound rally if it shows a move from a deficit to surplus as forecast.

However, any GBP/EUR gains could fade following the release of the UK GDP stats. Annual growth is forecast to decline from 2 per cent to 1.7 per cent, which could raise fears about the effects of Brexit on the economy.

Weekly Eurozone data to watch out for will consist of economic sentiment scores on Tuesday, followed by PMI measures on Wednesday.

The euro may decline on both sets of data as forecasts aren’t massively positive.