Sterling Gains Ground as Euro Slumps Amid EU Debt Concerns

Sterling is poised to record its biggest weekly gain against the euro in months due to growing concerns over the fiscal outlook of some highly indebted European countries.

This has led to a decline in confidence in the single currency, which was up just 0.05% at 85.23 pence on Friday but still set for a 0.87% weekly drop, its steepest since May.

The pound, however, is expected to fall for a third consecutive week against the dollar, despite strengthening after the Federal Reserve's hawkish shift in mid-September.

Evelyne Gomez-Liechti, multi-asset strategist at Mizuho, suggests that reports of progress towards a broader UK-EU reset may offer modest support for sterling sentiment.