FXStreet (Delhi) – Research Team at BBH, suggests that Sterling's 3.4% loss in January, the worst performing major currency after the New Zealand dollar (-5%), was driven by three factors. Key Quotes “These were disappointing economic data, recognition that it will take the BOE much longer to hike interest rates, and fears over Brexit. Slightly better than expected Q4 GDP, leaving H2 growth at the same pace as H1, failed to arrest the slide. Growth in Q4 was on a narrow base, and the PMIs, which will be reported ahead of the BOE meeting, will be closely watched. The manufacturing PMI came out today, better than expected at 52.9 and up from a revised 52.1 (was 51.9) in December. At least partly influenced by Japan's adoption of negative rates, the December 2016 short-sterling futures contract staged its biggest rally since September to reach new contract highs. The implied yield of 58 bp is consistent with no rate hike this year. It is one basis point more than the March contract implies. Without anticipating a rate cut, it is difficult to see much more of a decline in the implied yield for the end of the year. Under the new communication regime, the BOE's quarterly inflation report will be released at the conclusion of the MPC meeting as well. The 7.3% decline of sterling's TWI's from mid-November through January 19 was likely welcomed given the large merchandise trade deficit and low inflation.” For more information, read our latest forex news.