The British pound fell on Tuesday, on track for its biggest daily decline in two weeks against the dollar, after Bank of England chief Mark Carney did little to bolster interest rate hike expectations.
The pound fell around a third of a percent against the euro, leading to broad gains for the single currency. The euro barely reacted to a German IFO survey that showed sentiment weakened more than expected in June, as concerns grew among companies in Europe's largest economy that conflict in Ukraine and Iraq would hurt their business.
It was Carney's testimony to lawmakers that was the highlight of the European session. Carney, his deputy Charlie Bean and monetary policy committee member David Miles all emphasised the UK economy still had spare capacity that needed to be used up before interest rates rose.