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.

A Bank of England policymaker has said he would not be surprised if the pound fell further, but that the Bank of England could overlook the effect of weak sterling on inflation, possibly for years.

The dollar climbed to a seven-month high against the euro as the rate of US inflation increased in October, fuelling speculation the Federal Reserve will raise interest rates from near zero as soon as next month.

Gold advanced to the highest in seven weeks, boosted as investor confidence in the dollar waivered amid doubts US interest rates will rise this year.