Euro to Pound: Sterling correction lower continues, but analysts predict this decline won't last forever

The euro to pound exchange rate is trading 0.05 pct up on last night's closing level at 0.8481.

The pound to euro exchange rate is thus at 1.1791.

NB: These are spot market exchange rates, your bank will affix their own discretionary spread to the figures. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

Outlook still favours the British pound

According to analysts at Lloyds Bank CB Research we should not write off the prospects of the British pound just yet:

"Today’s MPC meeting is likely to be something of a non-event, but we would still see any move up to 0.85 in EUR/GBP as a selling opportunity. GBP/USD is more dependent on the general USD trend, but we would still look for a return above 1.60 before long."

Piet Lammens at KBC Market is also looking for a suitable entry point to buy sterling against the euro:

"We were looking to take more sterling long exposure on board in case of correction (which we are currently seeing). We are closing in on our 0.8450 to 0.85 target zone to go long sterling again.

"We look for further signs that the GBP-correction has run its course."

The euro: French and Italian industrial production of importance

Lloyds Bank Research give us a rundown of the latest issues facing the Euro:

"German industrial production data was slightly better than expected yesterday, but market jitters surrounding the US Budget situation have provided the USD with modest support against a range of currencies, and for now it seems that weakness in equities is likely to prove negative for the EUR and generally positive for the USD.

"Today’s French and Italian production numbers may have some impact on the EUR, after weaker number in July, but it is hard to see a major recovery in the EUR against the other majors as long as risk sentiment remains weak."