Today's live coverage of the pound sterling notes a dearth of economic data releases; however this does not mean to say that there is little of interest happening on the currency markets...

16:00: Euro faces a big test on Wednesday

The big day for the euro comes on Wednesday with the release of Eurozone GDP data.

"The euro dollar exchange rate is trading below the $1.3 mark, as traders are worried that the eurozone gross domestic product (GDP) report on Wednesday will be weak. The eurozone is in a recession and dealers are predicting that the region will be seen to have remained in a period of negative growth following Wednesday’s GDP report," says David Madden at IG Index.

14:00: Beware renewed GBP/USD weakness

A warning that the pound sterling could weaken in the medium term.

Paul Robson, Senior FX Strategist at RBS says:

"After a string of better data, we expect some weaker UK data to start coming through over the next week or so. More broadly, data surprises appear to be having a diminishing supportive impact on GBP. While data forecasters may have been slow to adjust, there appears a more widespread market view that data will surprise. Investors can’t be surprised by a surprise that everyone expects.

"The second derivative of surprises already looks to be turning over. GBP/USD weakness appears to have been driven by stronger US data which has seen the pendulum swing marginally in favour of the Fed tapering off its asset purchases.

"To be sure, the Fed still seems to be a long way off changing policy. However, financial markets move on marginal changes and recent labour market data suggest the balance has again drifted away from increased monetary accommodation.

"The recent GBP/USD rally has stalled several times at the 1.5607 50% retracement of the January to March decline. While there remains a risk that GBP/USD retraces to the 200d ma (currently 1.5757) or to the 61.8% retracement level of 1.5790, the balance of risk favours a run down to the 2013 low of 1.4838, in our view. A corruption of rising trendline support is expected to lead to more aggressive declines."

12:07: Pound euro in dramatic moves should UK pull out of EU

London’s Mayor Boris Johnson says country should be prepared to leave the EU.

What would this mean for the pound to euro exchange rate?

"One final point: we believe that the EUR will be a significant, bordering on dramatic “sell” if the UK edges closer to exiting the single market," says Stephen Gallo at BMO Capital Markets.

We will keep our eye open for further developments on this.
 

11:35: GBP could see more gains against the Australian dollar

Carole Ferguson at SP Angel says:

"A$ starting to weaken could be good news for A$ operations of miners

"Last week saw the A$ starting to weaken as rates were cut.

"This is the first sign that the currency could be turning which has been surprisingly strong against the sell off in commodities.

"The currency has been treated as a safe haven currency.

"There is good argument for the A$ to weaken further which will be good news on the cost side of the A$ operations of the miners."

10:00 US dollar seen outperforming the pound sterling

Piet Lammens at KBC Markets notes that while US dollar strength is the main theme on markets the sterling does have something to offer:

"At the end of last week, EUR/GBP still maintained its sideways consolidation pattern in the 0.8400 big figure. The focus in the currency markets was more on the dollar side of the story. Even so, sterling slightly outperformed the single currency. This move was supported by decent UK production data. The BoE, as expected, kept its policy unchanged. The NIESR April GDP estimate (0.8%) also suggests that the UK economy might be in better shape at the start of the second quarter. However, for now this cautious optimism on the UK economy is only of little help for the UK currency."