Pound slid vs dollar but has recovered back near 1.63 this morning

Heightened concern over the UK economy and an easing in risk appetite, saw the pound lose ground to the greenback yesterday, closing at $1.6214.

• The pound slid a further half cent against the dollar, as renewed fears over the UK economy were realised following the BoE’s quarterly report which stated that sterling’s long-run sustainable exchange rate may have fallen.
  
• The report added selling pressure to an already weak pound and strengthened investor sentiment now is not currently a good time to buy sterling from a risk-reward perspective.
  
• Haven demand was also supported yesterday as global equity markets fell with investors taking profits from last week's rally, which had propelled benchmark indices to year highs.
  
• With important interest rate data released in both the US and the UK later this week, investors were further encouraged out of risky positions, with volatility in the market likely.
  
• However, in trading this morning, risk speculation has returned to the market allowing the pound to regain yesterday’s losses against the greenback, currently trading just shy of $1.6300.