GETTYRISE: The pound to euro exchange rate remains volatile
It’s been a volatile week for the pound to euro exchange rate but it looks to be on the rise again.
The pound dropped to €1.13916 against the euro this morning after the markets reopened following the weekend.
However it has since risen and is currently sitting at €1.14003 (at the time of writing).
The reason for the drop could be ahead of the start of the second round of Brexit negotiations which began today.
CaxtonFX Currency Markets Analyst, Alexandra Russell-Oliver told the Daily Star Online: “Sterling pulled back against both the euro and the dollar this morning.
“This was likely partially a correction from earlier highs against the dollar around 1.31, which cable hit for the first time since September, and partly the result of downwards pressure ahead of the start of the second round of Brexit negotiations.”
Alexandra added to expect instability ahead for the pound this week.
She said: “This could be a volatile week for the pound, with markets keeping an eye on any Brexit headlines as well as June CPI and Retail Sales data.
“After today’s Eurozone inflation release found June CPI unrevised at 1.3%, attention for euro traders will be on Thursday’s ECB interest rate decision and press conference (typically a source of volatility in the euro).
“If ECB President Draghi takes a cautious tone, this could offset some of the euro’s recent gains on the back of QE tapering speculation and would likely see the euro weaken.”
The pound to dollar exchange rate has also seen a recovery after it hit the $1.31 mark for the first time in almost a year over the weekend.
The current pound to dollar exchange rate is $1.30692 (at the time of writing).
Alexandra added: “On the other side of the pond, releases from the US are mostly mid-level ahead of next week’s Fed meeting.”