Some evidence of softening parliamentary opposition to the Withdrawal Agreement supported Sterling on Monday.

US data overall was below expectations with the ISM manufacturing index declining to the lowest level since November 2016. President Trump also again criticised Fed policies.

The dollar was broadly resilient despite data concerns as other major currencies failed to sustain initial gains.

Sterling was again hit by profit taking, but with support on dips and a recovery on Monday amid reduced fears over a ‘no-deal’ Brexit outcome.

Risk appetite was boosted by hopes for a US-China trade deal with equities also underpinned by expectations of dovish global central bank policies.

Oil prices retreated sharply on Friday despite solid risk appetite.

Precious metals came under notable pressure with silver dipping to 2019 lows.

The UK PMI manufacturing index declined to 52.0 for February from a revised 52.6 previously and was in line with consensus forecasts. Brexit uncertainty and preparations continued to have a big impact with further very strong inventory building of raw materials. Overall sentiment deteriorated, however, to record lows while investment remained weak. Mortgage approvals data was above consensus forecasts, equalling 18-month highs while there was a significant rebound in consumer credit growth.

Sterling overall continued to correct lower with a lack of incentives for further buying. GBP/EUR moved back towards the 1.1600 level while GBP/USD dipped to lows below 1.3200 against the firm dollar.

Although earlier remarks had suggested an uncompromising stance from EU Chief Negotiator Barnier, reported comments after the European close were more positive with the offer of further guarantees that the backstop would be temporary.

Some evidence of softening parliamentary opposition to the Withdrawal Agreement supported Sterling on Monday as GBP/USD traded above 1.3200.

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