The pound euro (GBP/EUR) exchange rate is falling on Friday but is set to gain this week.
The pound is weakening against the euro as Middle East tensions cloud sentiment, with Iran threatening to pull out of talks and the Strait of Hormuz still largely closed. Despite this, oil prices are down around 10% this week, easing UK inflation pressures and reducing the need for further tightening from the Bank of England.
Meanwhile, the euro is supported by stronger inflation in Germany. German CPI rose 2,8% YoY in March, up from 1.9% in February, driven by rising energy costs
Higher inflation could keep the European Central Bank on a more hawkish path relative to the UK.