The pound hit a four-and-a-half month low against the euro as investors are wary of the potential for disagreement in the trade negotiations between the UK and the EU. The pound was 0.4% lower against the dollar and performed worse against a stronger euro, having lost a total of 3% this year against the single currency.
The pound is also being hit hard by coronavirus fears and the Bank of England says it is working with its partners to ensure that the banking system and broader economy are protected. Manufacturers have begun to report delays in their supply chains but there are still signs of strength in the UK economy. The highest number of mortgages for house purchases in four years were approved in January.
GBPUSD opened at 1.2811 and fell steadily across the day to hit a low of 1.2755. A late afternoon recovery saw the pair close at 1.2790
GBPEUR opened at 1.1578 and fell sharply across the day, closing at a low of 1.1458
The dollar fell to a six-week low against a basket of currencies on Monday as investors made further bets on the possibility of a rate-cut in response to the economic impact of the coronavirus. The dollar index was 0.53% lower. The euro was up 1.13% against the dollar as the European Central Bank expressed a reluctance to lower rates any further.
Elsewhere, the Japanese yen benefitted from its safe-haven status, gaining 0.1% against the dollar despite the implication that the Bank of Japan may also lower rates to combat the weaker global economic conditions.
EURUSD opened at 1.1065 and made steady gains across the day. Closing at a high of 1.1162
