Sterling declined as much as 0.4 % against the euro and dollar last week following a weak lending data which further added concerns over a European election for anti-EU UKIP party.

Traders said that the pound had very little trade during the U.S. and U.K. holidays earlier last week and was upset by Pfizer’s formal verification that it was ditching its plans to purchase AstraZeneca for almost an estimated $118 billion.

There is a diversity behind the above-mentioned move according to expert bank dealers and the certainty of the failed deal is just one piece of the whole pie. It should have taken into account the knock from the election result.

UKIP wants Britain to depart from the European Union which took nearly a third of the vote it required in the EU polls. This in turn prompted the party’s leader to target holding the balance of power following the succeeding year’s U.K. parliamentary election which is still not indicative of a clear winner.

Sterling is considered as one of the most considered picks among all major currencies since the second half of the previous year which is fuelled by expectations of a fast growing economy prompting the Bank of England to raise interest rates in the succeeding year.

Several BoE officers have already sought to tamper with such expectations in the previous month and data last week reveal that Britain’s banks approval last month regarding the lowest number of mortgages since last year was comprehendible. Moreover, sterling in an effort to recover its previous position, traded 0.1 % weaker on trading day at $1.6833 and 81.08 % per euro.

Struggles by the Dollar
The dollar declined 0.1 % against a basket of currencies which extended further weakness since the final weeks of another retreat in U.S. bond yields.

A sturdier dollar was among several investment houses’ major bets at the beginning of this year yet the U.S. economy has fallen short in delivering the comprehensive pickup that would dissuade the Fed in raising dollar returns for the coming year.

The U.S. two-year bond yields diminished approximately 10 basis points in the past despite a blip higher at the end of last week and are less than half their British equivalents.

The dollar is persistent in its struggle and it can be seen that in the U.S. rate differentials and rate curve by not moving in the dollar’s favour. Should the data not show the start of a more encouraging bounce from Q1, then there is a big possibility that the dollar will continue with its resistance.

The dollar trailed by 0.16 % against the yen to stand at 101.80 in Early European trade. It plummeted nearly 0.3 % against the Australian dollar and 0.2 % against the sterling respectively. Moreover, the euro was able to hold on most of its gains last week, mainly due to the result of a relief from the EU elections not delivering a hit to any of the bloc’s more delicate and debt-ridden nations.

It’s truly a depressing reflection of the deficiency of volatility in the FX markets that is reportedly within the 30 point movement as being indeed newsworthy. Prospects of policy action have weighed heavily in the past few weeks along with comments from the ECB chairman which could reinforce such speculations.

Finally, it was reported earlier this month that the ECB is well underway with its preparation of policy options for this June meeting which will noticeably include budget cuts in its interest rates as well as its targeted measures that are aimed at bolstering lending smaller companies in the process.