Investing.com - Sterling slipped on Wednesday following Chancellor Philip Hammond’s statements to Members of Parliament regarding Brexit and the overall economy.
GBP/USD dipped 0.08% to 1.3193 at 10:30 GMT, after hitting a low of 1.3180 as the market began to digest Hammond’s comment that there was a ‘cloud of uncertainty’ hanging over the UK economy as a result of Brexit.
Monday and Tuesday saw sterling rally against most major currencies as a Bank of England interest rate rise in November looked more likely. However, doubts crept back in on Wednesday. On Tuesday afternoon, the IMF upgraded global growth prospects including those of the G7 countries, with the exception of the UK.
The dollar looked weaker as doubts re-emerged over whether President Trump’s tax reform would pass through the largely Republican-heavy Congress. Investors are also looking to the release of the minutes from the September FOMC meeting on Wednesday afternoon.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six currency majors was steady at 93.03.
The euro started the day higher as Catalan President Carles Puigdemont declared independence for the region in northeastern Spain, only to suspend it some eight seconds later, while calling for dialogue with the government in Madrid.
EUR/GBP rose 0.17% to 0.8958, while EUR/USD edged up 0.08% to sit at 1.1818.
Sterling made losses against the safe haven currencies, GBP/JPY was 148.06, down 0.28% and GBP/CHF slipped 0.19% to 1.2846.
Against the commodity currencies the pound suffered minor losses. GBP/NZD was 1.8660 and GBP/CAD 1.6518. GBP/AUD dropped 0.22% to 1.6940.
The fifth round of Brexit talks will resume in Brussels on Thursday. The Prime Minister’s Questions in Parliament will be watched for any more indication on the government position - or split - on Brexit.