Sterling under pressure as bets on interest rate cuts increase

The Pound started the week trading mostly unchanged against most of its counterparts after the release of the UK's latest jobs data on Tuesday, which revealed a surge in unemployment.

In February, the unemployment rate rose to 4.2% from an upwardly revised reading of 4% in January. Additionally, wage growth slowed in the three months leading up to February, with the figure coming in at 6%, down from the previous 6.1%.

Both figures dampened Sterling sentiment on Tuesday, sparking increased speculation that the Bank of England will opt for interest rate cuts in the summer.

With a lack of significant data releases anticipated for the week, Sterling may face difficulty in establishing a clear trajectory, potentially leaving GBP exchange rates susceptible to the fluctuating market sentiment.

The only significant data release this week will be the UK's latest flash manufacturing and services PMIs for April. While the manufacturing figure disappointed, coming in at 48.7 compared to the market's prediction of 50.3, the Services PMI performed better than expected, at 54.9 versus an anticipated 53.

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