Pound nears one-month trough vs dollar; Dollar declines on Obama's unconfirmed comments

On Monday the pound tumbled against the U.S. dollar, re-approaching a one-month low as demand for the greenback remained broadly supported by Friday's positive U.S. employment data.

GBP/USD hit 1.5236 during European morning trade, the session low; the pair subsequently settled at 1.5244, shedding 0.19%.

The Guardian reported that Britain's business lobby group CBI cut outlook for the UK economy saying that a sharp slowdown at the start of 2015 mustn’t compromise the government’s programme of cuts.

Instead, the government should press ahead with its austerity drive, despite warnings that another round of deep cuts could undermine the rebound.

The CBI sought to paint a bright outlook for the UK of “solid, steady and sustainable” growth that will put it among the best performing of the G7 advanced economies. But it was forced to cut its estimates after official figures indicated the UK’s growth rate halved in the opening months of 2015. The CBI now sees the UK growing 2.4% this year and 2.5% in 2016, down from February’s forecasts of 2.7% and 2.6%, respectively, says the Guardian.

Meanwhile, the dollar fell 0.23% to trade at 125.31 yen, having hit a 13-year high of 125.86 yen on Friday after a strong U.S. jobs report.

Markets showed little reaction to data released on Monday that showed Japan's economy expanded more than initially expected in January-March as companies ramped up investment.

In a report, Bloomberg cited an unnamed French official who referred to U.S. President Barack Obama as saying that a strong dollar was a problem. The report came after a group of French reporters met President Francois Hollande on Monday ahead of the second day of the G7 summit.

The White House denied the report, however investors are now cautious as U.S. policy makers, including from the Federal Reserve, have in the past few months expressed worries about a strong currency impacting growth and exports.

The euro climbed on rising Bund yields and better-than-estimated German industrial output data which signaled that Europe's largest economy got off to a good start in the second quarter. EUR/USD was higher 0.22% to trade at 1.1138.