Risk appetite was off the table at the end of last week, buoying demand for the dollar

Sterling fell sharply on Friday, falling 1% to a two-week low of 1.6463 against the dollar, on concerns over the UK's fiscal health and waning investor appetite for perceived risky currencies.

• Concerns over the fragility of the UK's banking sector kept the pound under pressure, particularly as they coincided with investors taking profits on riskier currencies.
  
• Analysts noted that a worrying fiscal position is not new information as far as the pound is concerned, but the size of the deficit did surprise the markets, which decided to take the currency even lower.
  
• The moves were exacerbated as UK debt concerns coincided with falls in equities and commodities which encouraged traders to take profits on the recent rise in riskier currencies against the dollar and the yen.
  
• In trading this morning, the pound is up over 0.5%, climbing back toward 1.66 following comments from a US Fed policymaker that stated stimulus measures should be kept in place and ensure interest rates remain low.