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According to Reuters, the single currency dropped to 85.90 pence due to peripheral debt concerns.
But the news provider noted that the pound did not increase too much as traders wait to see what happens when the Bank of England inflation report comes out tomorrow.
Jeremy Stretch, head of currency strategy at CIBC, said he does not expect the euro/sterling move to break the 85.50 barrier.
He added: "Better UK data has been supporting sterling though there is a risk that the Bank of England governor Mervyn King could adopt a dovish bias tomorrow, which would take the wind out of sterling's sales."
This comes after the pound hit a one-month high versus the single currency yesterday morning as the euro decreased by 0.5 per cent against the UK tender.
Posted by Greg Secker
