Sterling traded near key support levels as investors turned their focus to UK jobs data.
UK factory activity in June and second-quarter GDP beat expectations sharply.
A tight labor market and upbeat economic performance are likely to increase expectations for peak interest rates.
Sterling (GBP) looked vulnerable as upbeat second-quarter gross domestic product (GDP) and June factory data failed to provide support. GBP/USD faces headwinds from bearish market sentiment ahead of the release of UK jobs data at 6:00 GMT on Tuesday.
A sharp pick-up in UK second-quarter GDP data has made Bank of England (BOE) policymakers more willing to raise interest rates further to ensure a quick return to 2% inflation. If labor market conditions become tight and wage growth remains elevated, the deadly combination of a positive economic outlook and tight employment will raise expectations of peak interest rates.
