The euro hit its lowest point against sterling in 18 months today, as the G20 meeting failed to allay concerns over potential debt defaults by some eurozone countries.
The euro fell as low as 81.75p, its weakest since November 2008.
Traders said that sterling was gaining against the euro as investors digested last week’s tough UK Budget, which gave some reassurance that the country’s deficit would be tackled promptly.
Greece is looking to test the market for its debt with the issue of €4.65 billion (£3.8 billion) of short-term government bonds in mid-July.
But interest payable on existing Greek government bonds hit its highest level on record on Friday.
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Also jostling sentiment in the eurozone was the fact that private banks are due to repay about €440 billion of one-year loans to the European Central Bank on Thursday.
There are some worries that this could leave banks short of cash.