FX round-up: Pound hits two-year low after House speaker passes over Grieve amendment

An already weak pound was further undermined mid-morning after the speaker of the House of Commons did not choose the Grieve amendment among those to be voted on later in the day, with John Bercow's decision serving to send Sterling to a two-year low.

In response, the pound fell to an intra-session low of 1.2439, although by 2018 BST cable had trimmed its losses and was down by 0.42% at 1.24653.

It was a similar story against the euro, with Sterling dipping 0.33% to 1.1123.

Amid market chatter around possible interest rate cuts before the year was out, overnight the British Retail Consortium had reported that average sales growth had slowed to just 0.6% over the year ending 30 June.

That was the slowest increase since the industry group began recording figures back in 1995.

To take note of, contradictory reports surfaced on Tuesday as to whether Dublin would accept some physical checks on its border with the UK in case of a no-deal Brexit.

Understandably perhaps, across the Pond, Tuesday's slate of Fed speakers kept mum ahead of central bank chairman Jerome Powell's own semiannual testimony on monetary policy Congress.

But there was an exception, Patrick Harker, the head of the Philly Fed.

In an interview with the Wall Street Journal, Harker reportedly said that the US economy was "strong" and that he did not expect that any cuts would be needed in 2019.

He did however concede that slower growth overseas and uncertainty over trade policy had created downside risks for the economic outlook.

Related to Powell's speech scheduled for Wednesday, in a research note sent to clients, analysts at Unicredit wondered aloud: "A 25bp cut remains fully priced-in, but at the same time, the recent and abrupt change in market expectations also raises the question of how EUR-USD will react if Mr. Powell hints that the Fed may wait until September before cutting rates – as in our current baseline scenario."