Pound Drops Amid Former Brexit Minister Steve Baker's Remarks

The pound declined against its major opponents in the European session on Tuesday, following remarks from a Conservative MP suggesting that his Conservative colleagues are ready to vote against Chequers amendments and UK should have courage to "go forward without an agreement."

Speaking to BBC Radio 4's programme, Conservative MP Steve Baker said that there were at least 40 colleagues who are not going to accept a 'half in, half out' agreement shaped around the Prime Minister's Chequers blueprint.

MPs should be "unafraid to go forward without an agreement," he told.

Baker had resigned from the post of May's Brexit minister alongside David Davis in June.

Investors digested Brexit developments, with the Confederation of Business Industry demanding that Philip Hammond use the budget on 29 October to bolster investment by £3.5 billion to tackle Brexit uncertainty.

Also in focus were yuan movements and developments over Italy's budget plans for directional cues.

The currency has been trading in a positive territory against its major rivals in the Asian session, with the exception of the yen.

The pound declined to 0.8791 against the euro, from a 3-1/2-month high of 0.8767 touched at 3:30 am ET. The pound is likely to find support around the 0.89 level.

Preliminary data from the statsitical office Destatis showed that German exports declined for a second straight month in August, defying expectations for an increase.

Merchandise exports fell a calendar and seasonally-adjusted 0.1 percent from July, when they decreased 0.8 percent. Economists had expected a 0.4 percent increase.

The pound fell to 1.3034 against the greenback and 1.2959 against the franc, reversing from its early highs of 1.3106 and 1.3016, respectively. If the pound drops further, 1.29 and 1.26 are possibly seen as its next support levels against the greenback and the franc, respectively.

The U.K. currency slipped to a 6-day low of 147.35 against the yen, reversing from a high of 148.39 seen at 3:00 am ET. The next likely support for the pound is seen around the 146.00 region.

Looking ahead, at 8:15 am ET, Canada housing starts data for September is scheduled for release.

The Bank of England Deputy Governor Ben Broadbent testifies on the use of the Retail Price Index before the Economic Affairs Committee in London at 10:35 am ET.

At 2:00 pm ET, the Bank of Canada Senior Deputy Governor Carolyn Wilkins will take part in a panel discussion titled "Empowering Women in the Workplace" at an International Monetary Fund seminar in Bali.