Sterling spiked above $1.30 for a brief moment for the first time in five weeks yesterday, as the markets continued with their confidence that the BoE could tighten monetary policy. The pound is still relatively unstable though, having initially lost more than 2% against the US dollar when May lost her parliamentary majority.
Since then, it has recovered on the back of comments from Mark Carney who said a rate hike might be necessary in the future. The operative word there is might, but the City appeared to overlook that.
Elsewhere, European Central Bank President Mario Draghi woke the foreign exchange markets from their recent slumber as he pointed to a long-anticipated shift in policy over the coming months. GBP/EUR remained range-bound yesterday.
Later today we have the current account data out in the UK.