Sterling fell into the red on Monday amid reports that Mark Carney will finally announce whether he is to serve out his full term as Bank of England governor this week.
The pound was trading lower by 0.2% against the US dollar at 1.217. Versus the euro, sterling was relatively flat at 1.111.
The FTSE 100 was also down by 0.3% at 6965.3 points.
It comes after the Financial Times reported that Mr Carney will finally make an announcement as to whether he will stay at the helm of the central bank until 2021.
When he took up the post in 2013, it was agreed that Canadian Mr Carney would serve an initial five-year term with the option of another three years.
However, there has been mounting speculation that the governor is preparing to stand down early amid bitter criticism by Brexit supporters of his conduct during the EU referendum campaign.
Michael Hewson, chief market analyst at CMC Markets UK, says it is unlikely that Mr Carney will cut his tenure short.
“He’s already well into his initial five-year term, and while he’s yet to decide to take up the option of the extra three years, he doesn’t strike me as a quitter.
“There is also the fact that a departure now at such a sensitive time would tarnish any form of legacy that he may wish to leave, which suggests he’ll probably be around for a while longer, keeping his hand on the tiller,” Mr Hewson said.
Downing Street voiced strong backing for the governor on Monday, saying that Theresa May regards him as “absolutely” the right man for the job, adding that the Prime Minister was “supportive” of Mr Carney remaining at the bank until 2021.
Across Europe, the French Cac 40 and German Dax were both trading lower by 0.8% and 0.4%, respectively.
Oil was trading lower by 0.6% at 50.38 US dollars per barrel after non-Opec crude producers stopped short of committing to an Opec output cap over the weekend that would help support oil prices.
However, a statement released by officials said another meeting would be scheduled ahead of Opec’s formal gathering on November 30.
In UK stocks, WPP shares rose nearly 4% or 64p to 1772p to top the FTSE 100, despite reporting that “Brexit anxiety” led to a slowdown in UK sales growth.
The advertising giant said like-for-like growth in the UK came in at 2.1% in the third quarter, compared with 3.5% in the previous quarter.
However, the impact of the weak pound helped boost overall revenue by 23.4% to £3.6 billion, with North America and continental Europe driving growth.
Away from the top tier index, Majestic Wine shares were down nearly 3% or 8.5p at 281.8p despite announcing a new next-day delivery service that it said would bolster Christmas trading.
It comes after the wine warehouse retailer said earnings would take a hit from a failed marketing campaign for its Naked Wines business in America and weak sales to business customers.
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