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According to Reuters, the single currency stood at 84.50 pence close to a low of 84.28 not seen since September 21st.
Analysts have stated the euro was affected by the rumours Ireland's debt crisis may spread with Portugal and Spain possibly in need of help.
But Kenneth Broux, market economist at Lloyds Banking Group, said in comparison to the single currency, the pound should be outperforming it.
He added: "Against the dollar it's not quite so clear-cut. Long sterling positioning suggests the market could be overstretched and cable could play catch-up with euro/dollar."
Yesterday, sterling was at a one-month low against the US tender at $1.5742, although on Monday the pound made a positive start to the week against the dollar when it increased by 0.5 per cent.
Posted by Greg Secker
