The pound is currently trading against the euro at €1.1267, falling from yesterdays €1.131.
Bank of England governor Mark Carney and other officials were up before MPs at the Treasury Select Committee discussing bank stress tests as well as Brexit.
But despite the discussions sterling has failed to benefit from a three-week low.
The fall in the rate can be attributed to the recent comments from Michel Barnier, Brexit chief negotiator.
He stated recently that Britain must “face the consequences” after choosing to the leave the EU, after Prime Minister Theresa May stated she would deliver a “red white and blue Brexit”.
The comments have led to uncertainty regarding trade deals for the UK.
According to Laura Parsons, currency analyst at TorFX, Wednesday was fairly dull for pound exchange rates, with GBP/EUR fluctuating around a three-week low amid a lack of particularly market moving news.
She explained: “Although Bank of England (BoE) Governor Mark Carney refrained from discussing monetary policy in yesterday’s speech to parliament, he did talk about a Brexit deal for the financial services sector.”
Despite recent commentary from the EU to the contrary, Carney asserted that special financial services trade deal could be implemented.
Laura added: “Such a deal would be pound positive if it was actually on the table, but as the odds are stacked against it Sterling failed to benefit from the remarks.
“With an overnight report showing a decline in UK consumer sentiment, GBP/EUR has been left trading in the region of €1.125.”
Michel Barnier’s comments came on Tuesday, and the EU’s chief Brexit negotiator asserted that is the UK left the single market its financial sector would not receive preferential treatment, and London would lose its financial services passport.
Laura commented on the news on Wednesday: “The pound held losses despite the German IFO business climate and expectations reports showing a decline in sentiment.
“Today’s speech from Bank of England (BoE) Governor Mark Carney has the potential to drive Sterling lower still.
“If Carney adopts a cautious tone on the subject of Brexit and its potential implications, the prospect of borrowing costs remaining on hold for longer would leave Sterling struggling.
“Conversely, upbeat commentary from Carney would give the pound a mid-week lift.”
