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The British pound rose against the dollar on Monday, pulling away from two-week lows, as investors anticipate more signals from the Bank of England this week over its future interest rate hike trajectory.

At 0830 GMT, the pound was up 0.12% against the dollar at $1.21090 It also strengthened against the single currency, rising 0.13% to 86.080 pence.

Sterling last week concluded its steepest six-month drop since 2016, down more than 10% versus the dollar so far this year.

Focus remains on the UK’s slowing economy, with the BoE tasked with tackling soaring inflation while avoiding a recession.

Inflation hit a 40-year record of 9.1% last month, the highest of the G7 countries. The BoE has hiked rates five times since December and its next scheduled rate announcement is Aug. 4.

Some market players anticipate a bigger hike of 50 bps at the next meeting. With a light week ahead for UK economic data, traders will be focusing on speeches by BoE members for hints around the central bank’s rate hike plans.

Pound rises despite record current account shortfall

BoE Chief Economist Huw Pill will speak on Wednesday and fellow member of the Monetary Policy Committee (MPC) Catherine L Mann will speak Thursday.

“Markets are pricing an 88% chance of a 50 bps hike at the moment from the Bank of England.

Rate expectations are still significantly skewed on the hawkish side,“ said Francesco Pesole, FX strategist at ING, adding that there was a downside risk for sterling over the next few months.

Brexit-related risks in relation to a possible partial suspension of the Northern Ireland protocol are also a focus for traders.

Germany and Ireland on Sunday told Britain there was no legal or political justification for Prime Minister Boris Johnson’s plan to override parts of the Brexit deal governing trade with Northern Ireland.

“Markets will probably wait for what the reaction from the EU will be, but it’s more a story of global risk sentiment.

Sterling is a pro-cyclical currency, cable should move mostly in line with the dollar,“ said Pesole.

After a volatile trading session on Friday that saw the euro touch a five-year low against the US dollar, currency markets have had a quiet start to the week, with US markets closed for the Independence Day Holiday.

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