The Pound Sterling drops to near 1.2300 as the BoE is expected to start reducing interest rates from August.
The S&P Global/CIPS UK preliminary PMI data for April will provide guidance on the economic outlook.
Two BoE policymakers are lined up to speak as investors seek clues about the interest-rate outlook.
The Pound Sterling (GBP) remains vulnerable at around 1.2300 in Monday’s London session. The GBP/USD is under pressure as the US Dollar (USD) holds strength on expectations that the US Federal Reserve (Fed) will maintain interest rates at their current levels for longer.
United States Consumer Price Index (CPI) has turned out hotter-than-expected in the first three months of the year and the county’s economic outlook is strong, suggesting that current interest rate framework is appropriate.
The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, is slightly positive above the crucial support of 106.00. Meanwhile, investors will shift focus to the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Friday. The monthly core PCE Price Index is estimated to grow steadily by 0.3%. Annually, the underlying inflation data is expected to soften to 2.6% from 2.8% in February.
On the United Kingdom front, investors await the S&P Global/CIPS preliminary PMI data for April, which will be published at 08:30 GMT. The Manufacturing PMI is expected to expand steadily by 50.3. The Services PMI is estimated to have declined slightly to 53.0 from 53.1.
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