Sterling dropped off this morning after making gains yesterday. With investors cautious about risks surrounding Brexit negotiations for the year ahead despite progress in the talks last week.
A survey on Monday showed British factories matched a three-decade high for orders this month prodded the pound higher against the dollar and euro.
However, Sterling was not able to hold on to those gains, even given the breakthrough in divorce talks between Britain and the European Union at the end of last week that will mean the two sides can move on to discussions on trade and a transition deal.
The dollar held steady against other major currencies in quiet trade today, as investors remained cautious regarding progress on the U.S. tax reform front and as they awaited the release of U.S. housing sector data due later in the day.
A very quiet week ahead for Sterling in terms of any actual economic data releases that could potentially move the markets. We have the UK GDP estimate on Friday which is expected to be in line with forecasts of 1.5% year on year.