GBP review

Western Union notes:

Sterling weakened despite better than expected news today on Britain's trade deficit which narrowed to £8.6 billion in April from a £10.7 billion shortfall in March. The data wasn't enough to allay worries about slowing momentum in the U.K. economy with inflation below zero for the first time since the 1960s and growth in the crucial services sector running at fresh lows for the year. 

Signs of strengthening U.S. job growth and general improvement in the euro zone economy have also contributed to the pound's under-performance. 

The pound could weaken further Wednesday if data on Britain's factory sector (please see table below) should cool which is the expectation.