The exchange rate dipped to a low of €1.15 early this morning before climbing slightly back to €1.16.
Sterling has been sliding for the better part of the week, despite influential data out of the UK.
Experts say the pound remains extremely volatile to the race to the general election on June 8.
Theresa May’s strong lead proved beneficial for the pound against the euro, as investors responded to the certainty of a majority-led government and strengthened position for Brexit negotiations.
But the Prime Minister’s lead has halved this week according to polling data.
The Conservative manifesto and other proposed policies from the government have sent sterling plunging.
TorFX currency analyst Laura Parsons: “The pound had a pretty miserable Monday, with the currency falling against not only the euro but the US, Australian, New Zealand and Canadian dollars in reaction to the latest UK election news.
“The Conservative manifesto, and particularly policies like the so-called ‘Dementia Tax’ resulted in a marked decline in the party’s lead in the polls.
“Prior to the manifesto’s publication, the Conservatives had a 20 point lead against Labour. By Monday that had fallen to a 10 point lead.
“As it’s believed that a landslide victory for the Conservatives could improve the UK’s Brexit negotiating power with the EU, signs that the outcome might not be as clear cut as previously expected triggered GBP/EUR losses.”
Meanwhile the euro’s buying power is on the rise, on the back of comments made by German Chancellor Angela Merkel surrounding the single currency.
Mrs Merkel admitted Germany‘s trade exports have reaped huge benefits from the weak euro.
But the German leader said the ECB’s ultra low interest rates and mammoth money-printing programme were the cause.
The comments caused a huge surge in the single currency amid expectations monetary policymakers could feel pressured into changing their stance.
The exchange rate will face a fresh test today on the release of more data out of the UK.
Ms Parsons said: “Today’s UK public finance figures will be the next source of GBP movement, with disappointing results potentially driving the pound lower still.”
