Sterling edged lower against the U.S. dollar on Monday ahead of a number of central bank meetings this week including the Bank of England's, which is expected to hike rates for the 10th consecutive time.
The BoE looks on course for its first rate rise this year, with markets pricing in a half percentage point increase to 4% on Thursday.
Sterling edged 0.14% lower against the U.S. dollar at $1.2380, trading not far from a seven-month high of $1.2381 touched last week.
Simon Harvey, head of FX Analysis at Monex, said sterling performance has been largely uneventful but that it is not any indication on how the currency will be trading this week.
"Not only do GBP traders have to face up to fresh interest rate decisions from major central banks including the BoE, but it will also have to trade amid a volatile cross-asset risk environment as markets are set to receive the first official gauge of how China’s reopening is playing out," he said.
Monex sees higher risks towards a lower terminal rate than markets are pricing, "but this isn’t necessarily GBP negative", Harvey said.
Sterling fell 0.4% against the euro to 88.00 pence on the back of higher inflation in Spain bolstering expectations for the European Central Bank, which is also expected to hike interest rates by half a percentage point on Thursday.
