Pound sterling (GBP) looks a little firmer against some major currenies on Tuesday with markets suggesting calmer conditions may lie ahead. All eyes are on today's European Council meeting to be held in Brussels.

Pound to euro exchange rate today: 0.12% higher @ 1.2011

Pound to dollar exchange rate today: 0.53% higher @ 1.3301

Pound to Australian dollar exchange rate today: 0.37% down @ 1.7970

Pound to New Zealand dollar exchange rate today: 0.61% down at 1.8791

Pound to Canadian dollar exchange rate today: 0.05% down at 1.7281

The British pound is trading with a more confident tone on Tuesday the 28th June with some early signs that the market may be stabilising.

Don't confuse 'stabilising' with 'improving' - I am not suggesting we are at the start of a broad-based recovery in GBP.

Rather, the eye-watering declines seen over the past two trading days in global FX could be a thing of the past and more settled conditions could persist.

Pound sterling hit a 31 year low against the US dollar on Monday:

Above: Fresh 30 year lows seen in GBP/USD on Monday 27th June 2016

"Technically, GBPUSD’s pace of drop is likely to slow but there are no indicators to pinpoint where the bottom will be when declines finally abate. We view 1.30 to be a firm support and could trigger a modest bounce," says a technical note concerning the pound's outlook from Hong Leong Berhard Bank.

We have meanwhile seen the pound to euro exchange rate (GBP/EUR) attempt to defend the floor at 1.20.

The pair briefly fell towards 1.1950 but buying interest has since carried it back above the psychological threshold.

Could this level start to emerge as the first level of notable support for GBP/EUR in a post-Brexit world?

Events What to Watch

Key issues at hand today include David Cameron's first meeting with his European counterparts in Brussels today.

Markets will want the fog of uncertainty lifted, and will be watching for signs of unity and purpose.

To a lesser extent, the digestion of the overnight cut by S&P to their AAA sovereign debt rating for the UK will be required.

Initial reactions suggest the GBP was unfazed by the move.

Note that stock markets are up sharply, as are commodities and commodity currencies.

This is a good sign that overall risk sentiment is improving, this should also go some way in settling sterling.

Osborne Looks to Calm Frayed Nerves

It would appear that the appearance of Chancellor George Osborne on Monday have gone some way in quelling market anxiety.

Osborne said the UK is strong enough to withstand Brexit, and that his team at the Treasury have planned for the event.

He told markets to not underestimate Britain's resolve in working through the current uncertainty.

"There are some signs of stabilisation this morning and the pound has recovered slightly it is still too early to expect a more sustained rebound for the pound. Both the effect of the Brexit vote on the UK economy and the political situation is still very uncertain although Prime Minister Cameron yesterday ruled out the possibility of a new Brexit vote," says Andreas Johnson at SEB Bank.

Nevertheless, it would appear that the easiest route forward for the pound is lower.

Domestic political consensus on the way forward for the UK-EU divorce looks far off at this stage with British politics entering a highly-uncertain period.

The European Union also appears divided on how to respond too - pragmatic thinkers in Germany would like to see a ‘slowly does it’ approach, while the French want a more immediate response.

France arguably has more to lose should a Brexit seem amicable as there are calls within France for a similar referendum.

This is nothing short of an EU nightmare - copycat referenda will surely end the union.

A cocktail of uncertainty remains and we are by no means confident on GBP just yet.

Watch Central Bank Conference in Sintra

Foreign exchange markets have been bidding the dollar higher over recent days with investors winding back expectations for a rate hike from the Fed this year.

They have even started to price in a small chance of a rate cut by year end. The market is pricing in 15% chance of a rate hike by year end, down from 50% prior to the Brexit vote.

That said, stability could be offered by central bankers when they meet at the Sintra conference in Portugal, held from 27-29 June.

Draghi, Yellen, and Carney are scheduled to speak on a panel together on the final day of the conference.

There are however reports that Carney has dropped out.

“We’ll surely see some sort of questions there on the monetary policy implications from Brexit, and with this many central bankers and policymakers in one place, we should see some interesting comments from the sidelines as well,” say TD Securities in a client brief at the head of the week.