• The Pound Sterling juggles in a tight range around 1.2550 against the US Dollar as investors shift focus to the BoE policy decision.
• The BoE could provide meaningful cues on the timing of rate cuts amid easing price pressures.
• Slower US job growth and a contraction in the Services PMI have raised concerns over the economic outlook.

The Pound Sterling (GBP) is stuck in a tight range around 1.2550 against the US Dollar (USD) in Monday’s London session. The GBP/USD pair is expected to remain less volatile and will be guided by the market sentiment as the United Kingdom markets are closed on account of Early May.

The GBP/USD struggles for a direction as the US Dollar consolidates in the aftermath of United States Nonfarm Payrolls (NFP) and the ISM Services Purchasing Managers Index (PMI) data for April. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, trades sideways above 105.00.

The overall data indicated that the US economy is losing strength: fewer jobs were added, the Unemployment Rate rose to 3.9%, wage growth slowed, and the ISM Services PMI fell below the 50.0 threshold – the level that separates expansion from contraction – to the lowest reading since December 2022.

Despite the downbeat overall picture presented by Friday’s data, investors didn’t bring forward  Federal Reserve (Fed) rate cut bets from September as the ISM Prices Paid subindex for the service sector rose significantly to 59.4 from 53.4 in March. High Prices Paid for service sector inputs renewed fears of inflation remaining higher, which is expected to allow the Fed to emphasize maintaining interest rates restrictive for a longer period. Respondents to the ISM survey said: “Inflation is raising our unit cost on products and services when compared to last year’s expenditures.”