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Pound sterling's next hurdle is PMI data for May, due mid-morning London time.
The British pound has staged a recovery over the course of the week and could extend it further if Thursday's PMI data beat expectations.
The expectation is that the PMI survey of the economy's private sector showed a slight slowdown in growth during May.
However, both the services and manufacturing components are expected to show ongoing expansion, resulting in a composite PMI reading of 51.6.
The PMI is considered a timely spot-check on the economy as it is the most timely major data print available. It should show how the economy remains in a relatively healthy position despite elevated political uncertainty and the effects of the war in the Middle East.
It is released just a day after the ONS reported inflation fell back to 2.8% in April, which proved a handsome undershoot on the 3.0% expected by the market.
That allowed money markets to pare expectations for Bank of England interest rate rises: the OIS market prices just under a 50% chance of a hike in July and just under 50bp of hikes during the remainder of 2026.
For the pound that repricing would typically be a headwind, but data shows rate hike expectations are falling elsewhere too, which means that this is not a unique situation for the pound.
Ahead of the data, the pound to euro exchange rate trades at 1.1554, up from Friday's low at 1.1476.
The pound to dollar exchange rate is at 1.3430, the week's low is at 1.33.
