The pound remained pressured Monday by mounting expectations that the Bank of England will soon be in a position to cut interest rates from their current level of 5.0 percent.
The BoE’s bleak assessment of Britain’s economic outlook pushed sterling down to a two-year low against the dollar on Friday and is now trading around the 1.8640 dollar mark.
The dollar meanwhile shed some of its recent gains as traders locked in gains amid higher oil and commodity prices.
Higher energy and commodity prices tend to be US dollar-negative as they fuel inflation pressure at a time when the US economy is slowing sharply in the wake of a year-old global credit market crisis.
As a result, the euro, which fell to a six-month low of $1.4645 in early Asian trade recovered to $1.4712, up 0.1 percent from late Friday US trade.
The euro has tumbled nearly six percent against the dollar in two weeks due to increasing investor concern that the slowdown in the U.S. economy will be replicated in Europe and globally.
| Sterling | 16:58 | Friday close |
| Euro | 1.2692 up from | 1.2676 |
| US dollar | 1.8643 down from | 1.8669 |
| Yen | 205.92 down from | 205.57 |
| Swiss france | 2.0443 down from | 2.0469 |