Pound to euro exchange rate: Sterling struggles ahead of critical update on Brexit

The exchange rate has climbed slightly this morning to €1.100, up from €1.094 at the end of last week. 

Sterling was hit by disappointing inflation figures out to the UK on Thursday. 

The data quelled hopes of an interest rate rise in coming months, sending the pound spiralling to lows of €1.093. 

TorFX currency analyst Laura Parsons said: “Over the course of last week GBP/EUR dipped from highs of €1.103 to lows of €1.093 as disappointing UK inflation figures crushed hopes that interest rates will rise in the near future. 

“In the week ahead the pound could move in response to domestic borrowing and growth figures, but it would take some seriously good UK news (or else some pretty poor news from the Eurozone) to give GBP/EUR much of a lift.”

Sterling continues to be heavily influenced by political and economic events. 

This week the Brexit Department will publish five new papers, including two formal position papers on the continuity in the availability of goods and confidentiality of documents.

Brexit secretary David Davis said: “Over the coming weeks and months more papers will be published because we are ready to sit down with the European Commission and continue to to discuss how we want to work together in the future.

“We mustn’t forget our overarching aim - to build a deep and special new partnership with our closes neighbours and allies while also building a try global Britain that can forge new relationships with fast-growing economies around the world.”

The jurisdiction of the European Court of Justice (ECJ) and data protection will also be discussed in this week’s Brexit papers. 

Sterling also remains vulnerable to Britain’s Public Sector Net Borrowing for July, set for release this morning. 

Some experts believe a comeback for the UK currency is ahead. 

Paul Hollingsworth, UK economist at Capital Economics, said: "We think that there are a number of reasons for the pound to reverse some of its recent losses against the euro.

“We don’t share other forecasters’ pessimism about the prospects for economic growth, for either the near term, or the lead up to Brexit itself.

"While we expect the eurozone economy to outperform the UK’s this year to a similar degree as the consensus, we think that other forecasters are being much too pessimistic about the UK’s growth prospects next year."

The struggling exchange rate has hit holidaymakers jetting off for summer vacations in Europe. 

Ian Strafford-Taylor, CEO of FairFX said: “As always, holidaymakers need to keep an eye on rates, and be smart with their holiday money. 

“It has never been more important to do your research and buy your currency when the pound moves in your favour. 

“Planning ahead and not leaving buying currency until the last minute will help your money go that much further when you head off on your well-earned break.”