While the UK avoided crashing out of the EU without a deal on Friday investors were not entirely encouraged by the prospect of another six months of Brexit-based uncertainty.
Although the UK economy showed signs of resilience in February, with the monthly gross domestic product bettering forecasts and avoiding stagnation, the mood towards the pound soon soured.
Without signs of concrete progress towards a Brexit consensus among MPs the appeal of the pound looks set to remain muted.
However, GBP exchange rates could return to a positive footing this week on the back of the latest UK average weekly earnings data.
With forecasts pointing towards a fresh acceleration in wage growth confidence in the resilience of UK households could improve, giving the pound a boost.
Even so, if March’s consumer price index data shows an uptick this could put pressure on GBP exchange rates, with the Bank of England (BoE) already looking set to remain on hold for longer.
Source: Currencies Direct