Sterling hit a seven-week low against the euro yesterday as the single currency shrugged off Ireland's ratings downgrade and continued concerns on Hungary.
After touching a near 18-month high against the euro late last month of below 81p, the pound has weakened during July.
The euro yesterday hit a session high of 85.32p, and is currently trading at 85.03p.
Sterling traders remain muted in anticipation of tomorrow's Monetary Policy Committee minutes, with member Andrew Sentance continuing to argue for an immediate interest rate rise.
While Hungary is not a member of the eurozone, there were fears the suspension of its EU and IMF bailout package could hit confidence of other states on the continent.
The single-currency also appears unaffected by Moody's downgrading Ireland's credit rating by one notch yesterday, from Aa1 to Aa2. It warns the country still faces a slow climb out of recession.
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Square Mile’s series of informal interviews
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