GBP/EUR exchange rates; GBP/EUR buyers struggle to realise better rates

At 10:30 in London we see the pound to euro exchange rate trading 0.14 pct in the red at 1.1925.

The inability of the British pound (GBP) to break above the 1.2 level remains a source of frustration for those hoping to be able to buy more euro's with their sterling.

Indeed, only once this level is decisively broken will be likely to see those strong exchange rates around 1.23 and 1.25 that we have been talking about recently.

PS: All quotations are taken from the wholesale inter-bank market. Your bank will affix a spread at their discretion when delivering you FX. However, an independent provider will seek to undercut your bank's offer, thus delivering up to 5% more currency. Please learn more here.

A slight blow was dealt to sterling earlier in the day when the Rightmove house price survey showed an unexpected fall by 2.4% month on month in November.

Ahead for GBP, the November MPC minutes will likely provide the highlight of the UK calendar this week, as further guidance is sought on the thoughts of the voting members following the inflation report and recent data.

Analyst Sasha Nugent at Caxton FX points out that the pound to euro exchange rate could be at risk of further losses this week:

"The GBPEUR rate has remained at elevated levels for a number of sessions, but this week brings plenty of event risk. Despite eurozone current account figures leaving the rate fairly unchanged, positive releases in the coming days could drive the GBPEUR rate lower.

"Eurozone data sparked little reaction and we expect some sideways trading around the 1.1950 level is mostly likely today."  

A light calendar leaves sterling vulnerable for weakness today, at least until the BoE monetary policy minutes are released on Wednesday.

Eurozone current account figures have done nothing for euro momentum, and after ending the week on the back foot, the dollar has enough opportunity to regain ground this week.

Meanwhile, the euro has basically recovered since the European Central Bank surprised markets with a 0.25% rate cut.

The final CPI inflation rate from Friday of 0.7% year on year justifies the banks decision to cut rates, and underlines the banks exceptionally loose monetary policy stance.

Risks remain that the ECB could announce further measures, with another long term refinancing still quite possible, which would be expected to weaken the Euro.