Sterling strengthens slightly despite the “shadow” of the EU Referendum

Sterling drifted higher against the majority of its trading partners on Monday as a quiet day in the markets allowed the currency to unwind some of the losses experienced last week. Sterling remains vulnerable to downward movement as the shadow of June’s referendum on EU membership continues to weigh heavily on sterling markets. Despite this, sterling briefly hit the highest level in almost three weeks against the euro on Monday as it found some respite.

Although today sees no economic data released from the UK, investors will be awaiting the testimony of Bank of England (BoE) Governor Carney this afternoon before the Lords Economic Affairs Committee. Although he is not expected to talk around monetary policy itself, any hints towards his thoughts on a potential exit from the EU could affect markets.

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