Sterling steadied as traders wait for service sector data due on Wednesday and ponder whether any positive impact from expected higher interest rates on the British currency has run its course.

Sterling has continued to lose ground against both EUR & USD following on from yesterday’s report showing that The UK’s net debt has now surpassed 100% of GDP levels.

UK Core Inflation figures were forecasted to remain unchanged at 6.8% but came out 0.3% higher. MoM inflation also released 0.3% higher to previous levels.

Sterling exchange rates had a brilliant end to the week with GBPUSD closing at 1.2817 and GBPEUR closing at 1.1716- both very interesting levels for Sterling sellers globally.

Yesterday main data topics were growth figures for Europe and jobless numbers from the US.
Europe have now recorded two consecutive quarters of economic slowdown, Q4 in 2022 and Q1 for 2023.

The US Dollar has remained near it’s recent two-month high with next week’s Federal Reserve interest rate decision looming. The Central Bank is widely expected to pause its year-long interest rate hiking cycle, but expectations are increasing on the possibility that this pause will be temporary, with a potential rate hike in July still on the cards.

After a great run of outperformance since February, UK economic data has generally underwhelmed since mid-May, according to analysts.

The dollar edged up against major peers today, as markets priced in around a 1-in-4 chance of the U.S. Federal Reserve raising benchmark rates this month after robust jobs data on Friday.