Anyone heading abroad for some last-minute sun will be disappointed to hear that the pound has fallen to a new eight year low against the euro due to global instability.
Britain’s currency tumbled to 1.075 against the euro before picking up to around 1.079 on Wednesday, as the third round of Brexit talks between Britain’s David Davis and Michel Barnier begin.
With the uncertainty surrounding Brexit likely to persist for some time, investors will continue to view the euro as a safe haven compared to volatile sterling and the weak dollar.
The approach of QE tapering, the euro’s strength against its major peers also shows little sign of slowing.
Paresh Davdra, CEO and Co-Founder of RationalFX, said: “The pound fell to a new eight year low yesterday as tensions rose fears over the North Korean missile aggression, leaving investors searching for safe haven assets.
“Sterling’s latest stumble against the euro has once again raised analyst speculation of parity with the euro for the first time in the shared currency’s history. This week’s slow progress in Brexit negotiations, with talks seemingly at an impasse over the UK’s exit bill, has weighed down a pound already under pressure from poor data.
“However, with the ambiguity over Brexit negotiations acting as the key pressure on the pound, there is the chance that once more clarity is established, the currency will be able to rise against the euro again. Investors will be watching the progress of talks closely to look for the chance of relief for the pound.”