Sterling prepped for rate decisions, shakes off UK political ructions

Sterling held mostly steady on Monday, ahead of a week packed with central bank decisions and key economic data, starting with a read on the UK jobs market that could be pivotal in setting expectations for what the Bank of England may do next week.

The currency market showed little reaction to developments on the political front in the UK, after the surprise resignation from parliament of former Conservative Prime Minister Boris Johnson and two fellow lawmakers over the weekend.

The pound, which is heading for its third successive quarterly gain against the dollar, was up 0.1% at $1.2594.

Volatility across the broader financial market was subdued on Monday, as traders prepared for a flurry of central-bank decisions on interest rates, starting with the U.S. Federal Reserve on Wednesday.

The Fed is widely expected to leave U.S. interest rates unchanged in a range of 5.00-5.25%. Tuesday’s Consumer Price Index (CPI) report might fine-tune what traders expect the central bank to do beyond the June meeting, as inflation remains well above its 2% target.

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