FX round-up: Pound´s reserve currency position in the spotlight

The pound was weighed down throughout the day as traders bid their time ahead of a speech from Bank of England Governor Mark Carney which, in the event, ended up sending cable sharply lower.

As of 19:21 BST cable was trading off by 1.49% at 1.3228, after Carney suggested that further policy easing would be undertaken during the summer.

The pound had hit an intray-peak of 1.3497 against the US greenback.

Of potentially enormous consequencues, if it was correct, S&P Global Ratings said the British pound´s 5.0% weighting in international foreign exchange reserves might shrink further because of Brexit and China´s growing desire to increase its own share.

YouGov/CEBR´s daily consumer confidence gauge dropped to its lowest level since May 2013 from 111.9 earlier in the month to 104.3,

Euro/dollar was also to be seen weaker amid unconfirmed reports that the European Central Bank would increase its purchases of Italian and Spanish sovereign debt above and beyond the limits implied by their share of the ECB´s capital, the so-called 'capital key', opening it perhaps to criticism from some quarters of monetary financing of debts.

"The German constitutional court’s recent ruling on the legality of the ECB’s outright monetary transactions (OMT) will have dispelled many doubts as to the legitimacy of QE and could have played a role in today’s reports that the ECB is considering moving away from the capital key as a constraint on the assets it purchases. Overall, the report underpins our view that the ECB is ready to undertake additional easing over the summer," BNP Paribas senior European economist Gizem Kara explained in a research note sent to clients.

In parallel, dollar/yen was to be seen higher by 0.44% to 103.27 on news of concerted action by central banks to step-in and steady the situation in global capital markets.

To take note of, a raft of Japanese economic reports were due out overnight, including reading on consumer price inflation and unemployment.