The pound euro (GBP/EUR) exchange rate is falling towards €1.1650, snapping a two day winning run.
The euro is recovering after weak German data dragged on euro demand yesterday. German IFO business climate fell to 87.3, its third straight month of declines. The data points to a prolonged recession in Germany.
ECB lending survey also showed that lending conditions had tightened further.
The pound is drifting lower amid a lack of fresh catalysts. This week is a quiet week for economic data for the UK, leaving sentiment to influence the pair.