It’s a shortened week and while spirits may be high after the holiday weekend, financial and currency markets are largely pessimistic. More than a week after the British referendum, Brexit is continuing to accelerate the pound’s decline this morning to fresh 31-year lows. Analysts are saying that at least part of sterling weakness is a result of the exchange rate’s adjustment to low expectations of economic growth. Politically also, there is continuing uncertainty over timeline for exit from the European Union and level of single-market access to the trading bloc.

Meanwhile, yields on US treasuries are at a record-low, showing that fear of economic slowdown is still continuing globally, driven by Brexit and the Federal Reserve’s decision to hold off on a rate hike. The market has priced in expectations for the Fed to increase interest rates down to just 12%. Federal Reserve meeting minutes will be released tomorrow and are expected to touch on the economic outlook for the US. Crucial data for unemployment and Nonfarm Payroll will be released on Friday and could shape the trend for the dollar against major peers.

It’s a big week for the markets. In other central bank action, the Reserve Bank of Australia made the decision to leave benchmark interest rates unchanged. The European Central Bank is holding a non-monetary policy meeting tomorrow and ECB president Mario Draghi is set to speak.

EURUSD: Euro continues trading relatively flat against the dollar in anticipation of ECB’s meeting and Draghi’s speech tomorrow.

GBPUSD: Sterling tumbles to fresh 31-year lows on continuing Brexit-driven uncertainty.

AUDUSD: Aussie dollar choppy despite RBA’s decision to maintain current rate.

USDCAD: Canadian dollar weakens on pessimistic global economic outlook and stalling oil prices, despite the release of positive GDP data last week.