The euro fell against the pound and the dollar today, prompted in part by news that the EU had dropped a ‘punishment clause’ over the UK’s transitional Brexit deal.
The pound rose back over the significant $1.40 mark as markets reacted to the move to drop a raft of penalties if the UK were to stray beyond the agreed rules of the 21-month transition.
A leaked EU report showing punishments such as grounding UK aircraft over Europe was shot down by leaders across the Continent, who thought the move would be counterproductive and prompt the UK to walk away from the table.
Euro falls despite weak dollar
The report had hit sterling, but it rebounded strongly today as it was revealed any UK infringements would be dealt with by standard EU procedures.
However, the euro also fell against the dollar, despite the fact the dollar has been in retreat over the past few days, with the US dollar index dropping nearly 4% since the start of the year.
The pound closed at $1.4047 and €1.1294, while the euro fell from $1.2537 to €1.2436 at close (5pm GMT).