FX round-up: Commodity currencies, yen weaker

Cable slipped slightly versus the US dollar ahead of Thursday's Monetary Policy Committee meeting as the Prime Minister and former London Mayor Boris Johnson traded blows over the risks to Britain's security arising from a possible exit from the European Union.

Cameron told an audience that, "whenever we turn our back on Europe, sooner or later we come to regret it."

His remarks echoed warnings from the ex-chiefs of MI5 and MI6 over the weekend, who penned an article in the Sunday Times warning of the risk that Brexit might, in time, lead to the fragmentation of the EU.

Johnson retorted that the EU's "anti-democratic tendencies" were "a force for instability and alienation".

The conflict in Ukraine was an example of "EU foreign policy-making on the hoof", Johnson said.

Sterling was 0.18% lower against the US dollar at 1.4406 as of 16:50 BST, while versus the single currency the pound was lower by 0.15% to 1.2633.

To take note of, over the weekend Bank of America-Merrill Lynch predicted the MPC's Gertjan Vlieghe might break ranks and vote for a cut to Bank Rate on 12 May, although analysts at Barclays deemed that unlikely - before the 23 June referendum at least.

However, the pound sprang higher by 0.92% to 156.00 versus the Japanese yen after the minutes of the Bank of Japan's last policy meeting laid bare sharp divisions among the country's central bankers regarding the relative merits of negative interest rates,

Acting as a backdrop, the US dollar spot index edged higher by 0.16% to reach 94.035, but was up by 1.10% to 108.3 relative the yen.

Euro/dollar was nearly unchanged, drifting lower by 0.02% to 1.1402.

Speaking at the City Week 2016 conference in London, European Central Bank Vitor Constancio said an upward path in US interest rates would lift 'animal spirits' Stateside, Market News International reported.

Constancio reportedly dismissed any notion that the ECB would welcome the weakness in the euro that might ensue as a result.

He also said the ECB was now firmly in "wait-and-see" mode.

Commodity currencies were broadly weaker versus the US dollar, with the Aussie retreating 0.63% to 0.7321 and the Kiwi down by 0.91% to 0.6777.

Canada's Loonie was also trading lower, with the US dollar gaining 0.62% to 1.2989 versus the Loonie.

Iron ore and rebar futures dropped limit-down overnight in Chinese trading.