The Pound was the second worst performer amongst the majors, finishing the day down 0.4% against the worlds base currency. The catalyst for the underperformance was a combination of broad based US dollar strength and cautious commentary delivered to the British parliament’s treasury select committee by incoming BOE policymaker John Haskel. Haskel aired his concerns regarding the uncertain impact Brexit will have on the domestic economy and expressed caution about whether the economy’s readiness for a higher interest rate setting. Markets took the comments as an indication that Haskel, whose views are relatively unknown, will be more likely to vote in favour of keeping interest rates on hold rather than raising them.
As a result, the pound fell to 1.3208 against the USD and also fell to 88.120 against the Euro, representing a nine day low. GDP data is due to be released on Friday which will give us a better indication of how the economy is faring however traders are seemingly cautious on the pound ahead of the European Union leaders summit later in the week which will be closely watched for any indication on what the trading relationship between the UK and the single market will look like post-divorce.