At 10:35 we see the pound to euro exchange rate trading at 1.2025 - about 0.4 pct lower than at Friday's close. The exchange rate had touched the 1.2 level at one stage but has since momentarily stabilised.
(Note, the above are spot market quotes, your bank will affix a spread at their discretion. An independent FX provider will however guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.).
The British pound started Monday off on the back-foot with profit-taking being executed against the majority of currencies.
Sterling continues to enjoy a strong run and these bouts of selling can be expected.
However, the sell-off accelerated at 09:30 when December's Services PMI data was released by Markit.
UK PMI Services came in at 58.8 versus 60.0 prior and 60.3 expected.
The result was a spike lower in all of the British pound sterling cross rates; GBP/EUR included.
It was always going to be a tough ask for the PMI to beat expectations, Chris Williamson, Chief Economist at Markit says:
“Service providers ended 2013 in a buoyant mood. Although growth of business activity slowed, it’s come down from super-strong levels and the pace of expansion remains elevated.
Indeed, the prospects for the UK economy in 2014 remain positive:
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply:
“The UK services sector continues to hit the high notes as business confidence surged to its highest level in nearly 4 years. The average new business growth rate in the final quarter of 2013 was the best in the survey’s history, suggesting a very bright outlook for 2014.
"The stronger positive outlook also offers a platform for investment and expansion in new products and marketing, sustaining the continued broad based recovery in the New Year."
The Eurozone will be hard pressed to match such growth; hence the prospects of the pound to euro exchange rate in 2014 remain positive.