Sterling had initially gained at the start of the day as there were more signs that prominent Brexiteer lawmakers were increasingly willing to consider compromise with May, which increased the chances of her withdrawal deal getting through Parliament next week. This follows on from the weekend where there were reports that suggested that the UK was softening its demands in the renegotiating of her Brexit deal.
As the day went on, concerns resurfaced about a slowdown in the British economy. Britain’s construction industry reported a drop for the first time in almost a year last month, with Brexit concerns weighing heavy on the performance of the economy as most people adopt a wait-and-see approach. However, there was a positive speech by Ireland Prime Minister Leo Varadkar which tempered afternoon losses, as he stated that Ireland would be “happy to offer further clarifications and further assurances if that can help the UK government to get the agreement over the line”. Despite this upbeat rhetoric, he did state that there would be no compromise on its position on the Irish border. As we get closer to next week’s key votes, the sticking points for many lawmakers remain unsolved.
15:00 - USD: ISM Non-Manufacturing PMI (Feb); expected to increase to 57.2 from 56.7
15:35 - GBP: BOE Governor Carney Speech