The Bank of England explains the exchange rate
It now converts to €1.126, based on a figure at 5:00 AM.
However, there has been fluctuation all morning which is now trending upwards – a rise of 0.06 per cent.
The pound saw a steep drop last Thursday as the Bank of England announced an interest rate hike.
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After Thursday’s dramatic losses, the pound was able to crawl slightly higher before the weekend
Laura Parsons, currency analyst at TorFx said: "After Thursday’s dramatic losses, the pound was able to crawl slightly higher before the weekend.”
She said this increase was “thanks to a better-than-forecast UK service sector report”.
However, Laura warned this small upwards trend does not put the GBP out of the woods.
In fact, a report today on economic confidence in the Eurozone - including Sentex Investor Confidence – may impact the pound further.
“GBP/EUR remains around the €1.125 level, but could slip again later today if the Eurozone’s confidence report shows an improvement in sentiment," Laura added.
The BoE interest rate was increased from 0.25 per cent to 0.5 per cent.
This increased it to the rate it was before the Brexit decision was announced.
Although the pound was expected to strengthen as a result of the BoE’s vote of economic confidence, this was not the case.
In fact, the fluctuation has spurred a drop in the pound’s value, after Mark Carney announced the interest rate rise was a one-off.
He announced in the speech last Thursday: “Until we see the effect of today’s move, there should be no further increases”.
Following Mark’s announcement, Laura commented: “With the future for UK interest rates looking fairly unexciting.”
“Sterling may struggle to return to its recent multi-month highs.”