After recovering slightly against the euro and the dollar at the end of last week, the pound is trading around the same levels against the euro this morning and has weakened slightly against the dollar.
However, there is an eventful week ahead, which could spell volatility for the pound. The Bank of England will host its latest monetary policy meeting on Thursday against an uncertain economic backdrop. Expectations for an interest rate hike this month were high initially, but the emergence of the Omicron variant and a re-introduction of some restrictions has reduced expectations for this.
Despite this, a surprise decision to raise the rate could be advantageous for the pound.
Sterling is likely to react to any further announcements about coronavirus and restrictions. Inflation rate figures will also be released on Wednesday.
