The pound to euro exchange rate has fallen, eradicating the gains GBP made last week. The slump comes following reports that cross-party Brexit talks were close to collapse. The Conservative and Labour parties are currently locked in discussions over how Britain should leave the European Union, but both sides are struggling to break a parliamentary deadlock. Experts caution the pound is “vulnerable” as markets focus on political headlines today.
They predicted sterling would be unlikely to show any signs of improvement today due to limited news from both the UK and Eurozone.
The pound is currently trading at €1.163 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling chalked up a third consecutive day of losses against the euro on Wednesday, erasing last week’s gain, as jitters over a lack of progress in cross-party Brexit talks continued to put pressure on the pound,” Brown said.
“In the absence of any major economic releases thus far this week, markets have gravitated back towards political headlines to seek direction, with the impasse dampening sterling’s appeal.
“The day ahead sees another sparsely populated economic calendar, hence markets are likely to focus once again on political headlines, with the pound appearing vulnerable to further downside moves.”
Sterling has traded in a narrow range since Britain delayed its scheduled departure from the European Union to 31 October 2019.
The UK is still set to take part in European elections this month, however, something which analysts from financial services company ING suggest shows cross-party talks might have reached a stalemate.
The Government conceded on Tuesday that Britain would take part in the EU elections.
ING analysts said in a note to clients: ”The announcement that the UK will take part in European elections confirms that cross-party Brexit talks aren’t going anywhere fast. This also refocuses attention on a leadership challenge to May.”
Laura Parsons, currency analyst at TorFX, told Express.co.uk: ”It was a bit of a woeful Wednesday for the pound, with the British currency sliding half a cent against the euro.
“While the euro was supported by better-than-forecast industrial production data for Germany, the pound weakened across the board in response to reports that cross-party talks were close to collapse.
“Analysts suggested that the talks will be killed off by the Labour party’s EU election manifesto.
“News from both the UK and Eurozone is in short supply today so GBP/EUR could remain trading in the region of €1.162 – unless we see any dramatic Brexit developments of course.”
Despite Brexit causing chaos for passport validity and currency rates, Britons are staying true to the European Union, with a third vowing to always holiday within its borders.
A survey of 2,000 holidaymakers showed 33 per cent were not prepared to venture elsewhere.