The embattled Pound appears to be in freefall as it continued its decline against the single currency on Friday.
The weakening came after a report showed that the UK manufacturing sector grew at a slower pace than predicted, dampening demand for the currency and increasing doubts over the state of the British economy.
The decline marks its fourth-week of losses against the single currency and also saw it slip further against the US Dollar. The Pound has been battered by a combination of disappointing economic trade data out of the nation and an increase in confidence in the Eurozone which has been spurred on by investors believing that the worst of the Eurozone crisis is now over.
“The pound’s weakness against the euro is likely to continue,” said the chief strategist at FxPro Financial Services Ltd. “The decline is driven by a combination of both euro and U.K. stories. People are more optimistic about the euro and the U.K. is now less of a haven, especially when its economy is moving sideways.”
So far this year the Pound has weakened by 3.5% making it the second-worst performing currency after the Japanese Yen. The Euro meanwhile has strengthened by 3.4% and the Dollar has weakened by 0.6%.
The Eurozone received a further boost after it was revealed that inflation across the region fell to 2% in January as businesses cut prices in a bid to entice consumers back into the shops. Inflation is now close to the European Central Banks target potentially giving them the option of cutting interest rates even further in a bid to stimulate economic activity.
Despite the rising confidence, nothing seems to be able to lower the regions record high unemployment rate or to set the Southern regions back onto the path of growth. It is a good idea to remain cautious and not to become too confident that the crisis is over. In the past it was assumed things were improving before the next crisis reared its head.
As of 11:25 am
The Pound to Euro exchange rate is currently trading at 1.1590
The Pound to US Dollar exchange rate is currently trading at 1.5821
The Pound to Australian Dollar exchange rate is currently trading at 1.5229
The Euro to US Dollar exchange rate is currently trading at 1.3647
The Euro to Pound exchange rate is currently trading at 0.8627