• The Pound Sterling faces pressure as geopolitical tensions improve the appeal for safe-haven assets.
• UK’s employment and inflation data will influence speculation over BoE rate cuts.
• The UK economy is on track to come out of a technical recession.

The Pound Sterling (GBP) shows a modest recovery against the US Dollar in Monday’s London session. However, the near-term demand of the GBP/USD pair remains downbeat due to deepening Middle East tensions and speculation that the Bank of England (BoE) will start reducing interest rates sooner than the Federal Reserve (Fed).

Currently, financial markets anticipate that the BoE will begin lowering borrowing costs from August while the Fed is expected to follow the same from the September meeting. 

This week, the United Kingdom’s employment and inflation data will freshly guide market expectations for the BoE as markets wonder when it could start its much-awaited rate-cut cycle. Investors will keenly focus on the wage growth data for three months ending February, which will be released on Tuesday, as it remains a key driver to the UK’s stubborn price pressures.