The British pound rose back towards $1.31 today, although trading was quiet in the absence of any significant Brexit-related developments as the Conservative and opposition Labour parties continue their talks.
Volatility in the pound has collapsed since European Union leaders and the British government last week announced Brexit would be delayed for up to six months.
The extension has removed any risk of a no-deal Brexit but also raised the possibility of months of political uncertainty in Britain as politicians struggle to agree over how best – or whether at all – to leave the EU.
This week will offers more clues as to how the British economy is holding up in the face of prolonged British uncertainty.
On Tuesday, labour market data is published while Wednesday sees inflation numbers for March released.
With a lengthy delay to Brexit now we could see economic data have an impact on the currency markets, whereas until now we have seen markets controlled by politicians and Brexit talks.