Sterling fell to a fresh 2018 low on Tuesday, as concerns about an escalation in the trade dispute between the world’s two biggest economies weighed on risk sentiment.
With all eyes focused on the Bank of England’s policy decision on Thursday, in which it is expected to unveil its monetary policy stance for the rest of the year after a run of mixed data, investors cut bets on the British currency
No economists expect the BoE to raise rates on Thursday, and some are getting cold feet about their forecasts for a rate rise in August, which would be only the central bank’s second increase since the 2008 financial crisis.
Latest Brexit headlines offered no support.
Prime Minister Theresa May’s Brexit plans were rejected by parliament’s upper chamber on Monday, setting up a confrontation with pro-EU lawmakers later this week which will test her ability to lead a minority government.