Sterling was sold-off heavily on Monday representing its biggest one-day fall against the dollar in percentage terms since February 2009. Sterling was scrutinized after a poll showed a growing risk no party will win an outright majority in the upcoming election which created fears as a ‘hung’ parliament is perceived to be less able to reduce the UK’s mounting debt.

The dollar therefore benefitted once more from its safe-haven appeal and rose to multi-month highs on Monday.

Another knock to the pound was the disappointing mortgage approval numbers and an announcement by AIG saying it would sell its Asian life insurance business to UK insurer Prudential PLC.

The euro took its direction from conflicting headlines surrounding a possible EU bailout for debt-stricken Greece. Market participants continue to worry that even if Greece is bailed out by the EU other EU countries such as Italy, Spain, Portugal and Ireland would soon follow suit.

Today’s economic calendar is slightly lighter than yesterday’s as all eyes are on central bank announcements later in the week. Data releases today include construction PMI for February in the UK, in the eurozone flash inflation and Producer Prices and across the pond the Federal Reserve’s Beige Book, which looks at business condition across the States.