Pound may be hit by UK sex scandal

Sterling is likely to be driven this week by the state of Brexit negotiations and UK politics, after losing support from bets on central bank policy tightening.

The pound could see any slide exacerbated should it drop below $1.30, according to Morgan Stanley, with the resumption of Brexit talks, fallout from the Westminster sexual harassment scandal, and UK industrial data to provide direction.

The UK currency has fallen for three weeks on concerns about Brexit and as the Bank of England failed to signal the start of a tightening cycle after raising rates last week.