This leaves the pairing just shy of a one-month high.
The pound is continuing to trade narrowly against the euro after Bank of England (BoE) Governor, Mark Carney issued a damning assessment of what impact leaving the EU without a deal could do to the UK economy.
Speaking in a special cabinet meeting yesterday, Mr Carney warned that a chaotic no-deal Brexit could have a similar impact on the UK economy as the financial crash of 2008.
As part of Mr Carney’s worst-case scenario he suggested that house prices could plunge as much as 35 per cent over three years and send mortgage rates spiralling upwards.
Furthermore he reportedly warned that the failure to secure a deal could also drive unemployment back into double digits, while a falling pound could place considerable pressure on household finances due to roaring inflation.
Mr Carney’s words are likely to anger many pro-Brexit MPs, who have frequently criticised the BoE Governor for his ‘remain’ bias in the past, with Jacob Rees-Mogg previously branding Mr Carney as “the high priest of Project Fear”.
Mr Carney is scheduled to speak in Dublin later this morning and pound investors will likely be on the lookout for any more bleak forecasts from the BoE Governor.
At the same time the euro is struggling to find momentum this morning as the Eurozone’s latest trade balance came in below expectations.
While the drop was of no real note, of potential concern to euro investors was a sizable jump in the EU-US trade surplus over the past year, something which could complicate attempts to smooth over the trade relationship if it catches the eye of Donald Trump.
Looking ahead to the start of next week’s session, the pound euro exchange rate may look to tick higher with the release of the Eurozone’s latest CPI figures.
Economists forecast that the release will confirm that inflation across the bloc ticked lower last month, further dampening any hopes of the European Central Bank (ECB) accelerating the schedule for its next rate hike.
Meanwhile the UK will also publish its latest inflation figures on Wednesday.
Although domestic price growth is predicted to have edged higher in August, with the BoE unlikely to implement another rate hike until next May at the very earliest, investors are likely to see little upside to the data, potentially weakening the appeal of Sterling next week.