With no major economic data released throughout the day, markets were eagerly awaiting comments from European Central Bank (ECB) President Draghi, and Minouche Shafik from the Bank of England (BoE)’s Monetary Policy Committee. Sterling lost ground against the euro as Draghi talked positively of growth in domestic demand throughout the Eurozone, and with Shafik later confirming she will not vote for an interest rate hike until there is sustained wage growth, sterling lost all the ground made over the previous month.
Sterling also performed poorly against the US dollar, with expectations growing that the US Federal Reserve will look to raise interest rates in their meeting on Wednesday sitting at odds to the BoE’s current outlook. With the UK set to keep interest rates on hold well into 2016, sterling looks set to lose further ground against the dollar.
A data-heavy day will see things kick off with the release of inflation data from the UK this morning. Consumer inflation data is likely to be the most closely watched figure, and is expected to turn positive for the first time in four months.